Your assets are not limited to those physical things you see such as your house, company, money in the bank, etc. Whatever you own that yields monetary dividends is classified as an asset. And that includes your digital assets.
The world has become so digitalized that there is hardly anyone without one digital asset or the other. Talk about monetized YouTube channels, Instagram, cryptocurrency among others. All of these have the potential to rake in profits. It wouldn’t be good to have them just go to waste when you pass away, and that’s what will happen if no one knows your password to such accounts.
It therefore becomes important that you carry out estate planning for your digital assets. Since digital assets are not exactly handled as tangible assets, there are processes involved.
Firstly, let us list typical examples of digital assets.
Examples of digital assets
- Digital accounts containing any type of virtual currency that can be converted to cash
- Monetized social media accounts, eg YouTube channels
- Rights to digitalized works, such as a motion picture, game, etc.
- Blogs and their content
- Online videos, pictures, or music, etc.
Steps towards estate planning for digital assets
1. Inventory all your digital assets
You have to start by determining what digital assets you own, how you own them and where they are held. The truth is you may not even be aware of all your digital assets. You may have forgotten all about that cryptocurrency wallet where you bought a few coins. They may turn out to become quite a fortune in a few years.
To be safe, you would need to keep track of your login details to all your digital accounts including email and other social media accounts you use for business.
2. Know what assets you truly own
3. Store all your assets and their logins in a secure place
Now, you need to store your data properly to enable your family or fiduciary gain access to them when the need arises.
4. Add more security by backing up your data on a physical storage device
Storing your data in the cloud is not always enough. Cloud providers can make data access more complicated for your family. To make things easier for them, back up all your online data to your computer or storage. One good storage option is FidSafe®.
This also gives you another layer of protection.
5. Strategize on how you want your assets managed
You would be leaving your login details to someone when you pass away. Now you want to be sure that person is someone you can trust. However, you can always specify how you want the digital assets managed by your executor before passing down to the beneficiary. But most importantly, you have to be sure no one else has access to your login details. If there is, then fraud and theft wouldn’t be too far away.
It is also advisable to have a separate digital executor, one who handles only your digital assets.
6. Address all of that in your will
Just as you address your tangible assets in your will, do the same for the digital ones. Specify who you want each account to go to. When you pass away, the executor will grant access to the beneficiary, and they can continue using the asset to make wealth. Both tangible and digital assets should be addressed in the same will as you are only allowed to have one will.
Why you need estate planning for your digital assets
There are criminal and data privacy laws that prevent anyone from accessing an account unauthorized. So no matter how much good faith your spouse or child has, they cannot access your digital assets except you give them the allowance via your estate plan.
Talk to an estate planning attorney
Planning for your digital assets doesn’t have to be difficult. To ensure you get everything right without costly errors, talk to an attorney near you.