Our assets are no longer just physical; as technology progresses, we have more and more online assets. Look after them with a digital estate plan.
What Is a Digital Estate Plan?
A digital estate plan details your digital assets, their values, and how to access them. It will specify how you want your digital assets divided amongst family members.
What Are Digital Assets?
Digital assets are not just online bank accounts or bitcoin as one might think. Those would be counted as your financial asset. Digital assets could be code or unpublished manuscripts, domain names, and even digital photos and files.
You can include the following assets in a digital estate plan:
- Social media accounts
- Online shopping accounts
- Websites and blogs
- Intellectual property
- Domain names
- All files, photos, audio, and videos on your digital devices and online
- Email accounts
- Your digital devices
How to Create a Digital Estate Plan
Creating a digital estate plan is very similar to creating a normal estate plan. There are four easy steps to ensure you create a plan for every single one of your digital assets.
Step One: List Your Digital Assets
Write down all of your digital assets so you can ensure nothing is forgotten. You may choose to do this on a free day where you have time to go through everything to ensure you write it all down.
Don’t forget the following things:
- Digital family photos
- External hard drives and online storage
- Loyalty points
- Cryptocurrency, online trading accounts, and online banking (the assets held in these will be financial assets, but the accounts themselves are digital assets
- Domain names or websites and blogs
- Social media accounts (both professional and personal)
- Music, video, and image purchases
- Files and photos
- Online dating or shopping accounts
A complete list is key, so be sure to double and triple check to ensure you included everything.
Step Two: Decide What to Do With Each Asset
Leave clear instructions for what you want to be done with each asset. You may decide to transfer the asset to a certain family member, sell it and split the profit as per your will, or delete sensitive files.
If you keep an online or digital journal where you vent all of your frustrations, you may decide to have someone delete it to ensure it doesn’t hurt the feelings of loved ones. Your family photos on the other hand, may be shared with family members to ensure your precious memories live on long after your death. Similarly, you may decide to share movie or music purchases with your family so they can enjoy the entertainment you purchased.
Revenue generating online assets such as websites or blogs can be a little trickier to decide. If they are part of a business, then you need to consider any business partners you may have. You should discuss your estate planning with your business partner to ensure your business partner is cared for too. If you die and your share of the company is transferred to a non-business literate family member, then your business partner may lose a considerable share of the money. Consider transferring part of your share to your business partner so they retain controlling interest and giving your family small shares in the company so they can reap the profits after your death.
If you do not have a business partner, then revenue-generating assets may be split as per your wishes. You may decide to transfer the asset to someone or sell it and split the profits between your loved ones. Consider the business intelligence of your loved ones. A revenue-generating asset can be a cash cow for some people but turn into a liability if it is improperly managed. Only transfer these types of assets to people with the business acumen to manage them properly. After all, it is your legacy. You may want to leave that person some instructions and a walkthrough of the business and how it works.
Step Three: Appoint an Executor
Just like your will, you need an executor for your digital assets too. You may decide to appoint the same executor, so all your assets will be handled by someone you trust. The digital estate plan does not need to be separate from your will or estate plan; it can just be a separate section. We have just created a separate article to ensure you make a plan for your digital assets too.
Your executor should be somebody you trust to be impartial and to ensure your wishes are carried out. If there are disputes, the executor will play a part in resolving the dispute too. Many people appoint a professional like a lawyer or an accountant to ensure the process is handled correctly. The executor should not be close family, as it will add extra stress to your grieving loved ones to have to organise your affairs. The executor will have access to all your online accounts and files and might be the person you ask to delete sensitive material. Ensure you pick someone you trust to be discreet and someone who will not be offended by the materials they may have to delete.
Step Four: Make It Legal
Add your digital estate plan to your will. You will need two witnesses to witness your will. Keep the original copy in a safe place and give a copy to your attorney and the executor just in case your original copy is destroyed. The original copy will be vital in resolving any disputes, so be sure to keep the original copy safe and secure and tell the executor where the original copy is.
You will need to provide your executor with a list of passwords, financial details, and logins for everything listed. However, you should not write these details in the will. Anyone can request to see your will, and if there is a dispute that goes to court, your will becomes public record. Instead, create a separate document of logins and details and refer to it in the will. Ensure the executor will know where to find this too.