Everything You Need to Know About Including Digital Assets In Your Estate Plan —Part 2
Advances in digital technology have made many aspects of our lives exponentially easier and more convenient. However, digital technology has also created some serious complications when it comes to Wills and Trusts planning. In fact, if you haven’t properly addressed your digital assets in your Will and Trust, there’s a good chance that most of those assets will be lost forever at the time you die.
Without the proper Wills and Trusts planning, just locating and accessing your digital assets can be a major headache for your loved ones following your incapacity or death. Further, if your loved ones can access your digital assets, in some cases, doing so may violate privacy laws or the terms of service governing your accounts. Additionally, you may also have certain digital assets that you don’t want your loved ones to inherit, so you’ll need to take steps to restrict or limit access to those assets.
There are a number of special considerations you should be aware of when including digital assets in your Will and Trust. Last week in part one, we discussed the most common types of digital assets and the current legal landscape governing what happens to those assets upon your death or incapacity In this article, we offer some practical tips to ensure all of your digital assets are properly included in your Will and Trust so these assets can provide the most benefit for your loved ones for generations to come.
5 Steps For Including Digital Assets In Your Estate Plan
Most people own numerous digital assets, some of which may have significant monetary value and some which have purely sentimental value. You may also own digital assets which hold no value for anyone else or have certain digital property that you’d prefer your family and friends not access when you pass away.
To ensure all of your digital assets are properly accounted for, managed, and passed on exactly the way you want, you should take the following five steps:
- Create a detailed inventory with access instructions: You should start by creating a list of all the digital assets you currently own. Then, for each asset, provide detailed information about where the asset is stored online and how it can be accessed. This list should include all of the relevant login information and passwords. If you have a lot of different accounts, password management apps, such as LastPass, can help simplify this effort.
If you own cryptocurrency, you should prepare detailed instructions about how to access your cryptocurrency, and ensure that one or more people you trust know that you have a cryptocurrency and how to find your instructions. Because accessing cryptocurrency requires correct usernames and private keys, as well as knowledge of storage devices, leaving a detailed “How To” guide may be essential to ensure your loved ones can access these assets.
After you’ve created your inventory and access instructions, store these documents in a secure location with your other Wills and Trusts planning documents, and ensure your fiduciary and your lawyer, know how to access these documents in the event something happens to you. You should also back up any digital assets stored in the cloud to a computer, flash drive, or other physical storage devices to make them easier to manage. It is also important to remember to update your digital-asset inventory regularly to account for any new digital property you acquire or accounts you close.
- Add your digital assets to your Will and Trust: Once you’ve created the inventory of your digital assets, you’ll need to add those assets to your Will and Trust. These assets will typically pass your digital assets to your loved ones through either a will or a revocable living trust. Consult with us, your Personal Family Lawyer®, about which strategy is best suited for your situation.From there, specify in your will or trust the person, or persons, you want to inherit each asset. You should include detailed instructions for how you’d like the asset to be managed in the future with this. Additionally, some assets might be of no value to your family or be something you don’t want them to inherit or access, so you should specify that those accounts and files be closed by your fiduciary.
Do NOT provide the specific account info, logins, or passwords in your Wills and Trusts planning documents. This is especially true for wills as they become public records upon your death. This information should be stored in a secure place, and you should let your fiduciary know how to find and use it. You should consider using a digital asset management service, such as Directive Communication Systems, to support you with securing and managing your digital assets.
It’s also a good idea to include terms in your Will and Trust allowing your fiduciary to hire an IT consultant, especially if your fiduciary doesn’t have a lot of technical knowledge. This will help them manage and troubleshoot any technical challenges that come up, particularly with complex assets like cryptocurrency.
Alternatively, you can designate a separate co-fiduciary just to manage your digital assets, known as a digital executor. A digital executor is someone who’s specifically tasked with accessing and managing your digital assets upon your death. This might be a smart move if you have a lot of digital property or you own highly encrypted digital assets like Bitcoin.
Meet with us, your Personal Family Lawyer® to help decide if you should have a digital executor to manage your digital assets.
- Limit access: In your Will and Trust, you should also include instructions for your fiduciary about what level of access you want him or her to have. If there are any assets you want to limit access to, we can help you include the necessary terms in your Will and Trust to ensure your privacy is honored.
- Include relevant hardware: Your Will and Trust should also include provisions for any physical devices on which the digital assets are stored. Having quick access to this equipment will make it much easier for your fiduciary to access, manage, and transfer the assets. Since the data can be wiped clean, you can even leave these devices to someone other than the person who inherits the digital property.
- Check service providers’ access-authorization tools: You also need to review the terms and conditions for each of your online accounts. Some service providers have tools that allow you to easily designate access to others in the event of your death. If such a function is offered, you should use it to document who you want to access and manage these accounts when you pass on.
If you use these tools, make certain the people you named to inherit your digital assets using the providers’ access-authorization tools match those you’ve named in your Will and Trust. If not, the provider will likely give priority access to the person named with its tool, not your Will and Trust.
Don’t Neglect Your Digital Assets In Your Estate Plan
As technology continues to evolve and our lives become increasingly digitized, it’s vital that you adapt your Wills and Trusts planning to keep pace with these changes. As your
Personal Family Lawyer®, we can assist you in updating your Will and Trust to include but all of your digital assets along with your other traditional assets.
As your Personal Family Lawyer®, we are keenly aware of just how valuable your digital property can be. Our Wills and Trusts planning strategies are designed to ensure your digital assets are preserved and passed on seamlessly to your loved ones in the event of your death or incapacity. Furthermore, we can accomplish all of this while ensuring you have the maximum level of privacy and ensuring that you stay in full compliance with the latest laws and regulations governing the ever-changing digital universe. Contact us today to get started.
This article is a service of Levi L. Alexander, Personal Family Lawyer®. We do not just draft documents. We help to ensure you make informed and empowered decisions about life and death, for yourself and the people you love. This is why we offer a Family Wealth Planning Session™. During this session, you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session for free.
