Our lives are becoming increasingly digitally-focused and more online than ever before which means we need to adjust our future plans accordingly. With so many of us spending hours online each day, it’s very likely that we’re creating digital assets along the way.
When it comes to estate planning and Arizona probate, most people picture a house and a Will that outlines who it will be passed down to. Physical property is definitely a part of estate planning, but so are digital assets.
What are Digital Assets?
Digital assets include a wide variety of electronic records and files that are stored online. They might be on mobile devices or personal computers, or gaming devices. The best way to explain what digital assets are is that almost anything you keep a digital record of is considered a digital asset and something you should note in a digital Estate Plan.
A digital asset can include any of the following:
- Gaming accounts
- Email accounts
- Social media accounts
- Online bank accounts
- Online subscription-based accounts
- Marketplace or Ecommerce accounts such as eBay or Amazon
- Online chatroom accounts
- Photos saved online or in the cloud
- Online dating accounts
- Cell phone apps
- Loyalty program benefits such as credit card perks or frequent flyer miles
- Any other personal information you store on your computer, tablet, or cell phone
It’s important that you protect your assets and digital legacy. Creating a digital estate plan is the best solution and in addition, you’ll be saving your loved ones from added stress after your death.
In your digital estate plan, you can outline the passwords for your digital assets as well as how those assets should be managed and they won’t have to worry about navigating an extensive probate court process. You’re also protecting your online assets from risks like identity theft, hacking, and fraud.
How to Create a Digital Estate Plan in 4 Steps
Technology has become a massive part of our daily lives. Storing important information about ourselves and our loved ones has become second nature. Our passwords are saved instantly, our cell phones keep track of and store our photos, tablets house our downloaded movies, music, and favorite games. It can be difficult to keep track of it all, but a digital estate plan can help.
If you want to ensure your digital assets are kept safe and distributed according to your wishes, follow these four steps:
1. Take an Inventory of Your Digital Assets
Step #1 is to take an inventory of all your digital assets. Be very thorough and think about everything, from social media and gaming accounts to online banking information.
Next to every item in your list, write down the username and password associated with each account. Making a note of commonly asked security questions will also be useful, just in case those answers need to be referenced by family members after you’ve passed away.
2. Decide Where You Want Your Digital Assets to Go
Once you’ve got a master list of all your digital assets, you need to decide how these assets will be distributed. You may want some information saved, but you might also want some information erased completely. Some assets might be directly allocated to family members or certain family friends.
Here are a few ideas of what you might want to happen:
- Digital assets with monetary value to be given to your children
- Online photos to be handled by your spouse
- For income generating assets or online accounts relating to your business you might want to give access to a business partner
- If you have an online e-commerce business you might want a family member to continue running the business or have it shut down completely
3. Appoint a Digital Executor
Step #3 is to appoint an executor for your digital assets. This will be the person you entrust to carry out your wishes.
A digital executor has access to all your online accounts and is charged with handling how they are distributed or destroyed. They can be anyone you choose, but it’s often better if you appoint an attorney or friend as this will remove any undue stress on your grieving loved ones.
4. Secure Your Digital Estate Plan and Make Sure It’s Legally Binding
The final step is to legitimize your estate plan by securing your information and turning it into a legally binding document. In certain US states, a digital Estate Plan is not acknowledged so you formalize it by making a note in your Will or adding it as a codicil to Will.
You keep your digital Estate Plan separate because it stops your usernames and passwords from becoming public information. In addition, it allows you to update it on an annual basis, as you create and delete online accounts.
To ensure your digital Estate Plan is safe, keep it with your attorney, storing your information in a password-saving online database or locking it away in a filing cabinet.