Ensure your estate plan addresses every detail, including your personal belongings. This guide outlines the pros and cons of various methods for managing assets like household goods, jewelry, and collectibles.
Article by Nancy O’Neal, CFP®, CFIRS™ – Executive Vice President & Chief Compliance Officer
You’ve been meticulous in ensuring your estate plan is in place: your assets are properly titled, all necessary legal documents are signed, and your heirs are well-informed about your intentions for family heirlooms and other valuable personal property. However, have you considered the fate of your digital assets?
In today’s digital world, most people maintain online accounts and store important items—such as documents, photos, and music—on electronic devices. But what happens to these assets if you become incapacitated or pass away? If you haven’t taken the proper steps to grant someone the legal authority to access and manage your digital assets, you risk losing valuable and irreplaceable content such as important documents and family photos.
The first step is to create a comprehensive inventory of your digital assets.
Begin by listing all electronic devices, such as computers, smartphones, or tablets, that store data. Then, document your online accounts—email, social media, financial, online retailers, and virtual currency accounts. If you own domain names, copyrighted materials, or trademarks, be sure to include those as well.
For each asset, provide detailed access information: the web address, account number, username, password, and two-factor authentication details (if applicable). Additionally, outline your wishes regarding each asset. Do you want an account deleted upon your death or incapacity? Should family photos or other personal items be transferred to specific heirs? This list should clearly define how you want each digital asset managed, and it’s important to update it regularly as your digital footprint evolves.
Consider appointing a Digital Executor to carry out your instructions concerning your digital assets. While not a legally binding designation, choosing someone trustworthy and technically capable to handle these tasks can be highly beneficial. This person could be different from the individual responsible for settling your other affairs.
The average person manages between 70 and 80 passwords.
As this can be overwhelming, a password manager, such as Keeper, LastPass, or Dashlane, can simplify the process. These programs securely store and organize your passwords, and using one allows you to provide your Digital Executor with access to all necessary information through a single account, streamlining the management process.
The most crucial aspects of planning for your digital assets is ensuring you have the appropriate legal consents in place. Simply providing access information is not enough. Federal and state laws designed to protect privacy and prevent unauthorized access may also impede your heirs from accessing your digital assets after your death or incapacity. Some websites offer tools that allow you to grant account access to a designated individual or direct the provider to delete your account in the event of your passing. In addition to these tools, you should also consult with your attorney to incorporate legally enforceable instructions regarding your digital assets in your power of attorney, will, or trust agreement. Without specific direction, the terms of service agreements you accepted when creating your accounts will govern access, and these are often designed to prioritize the service provider’s protection, potentially making it challenging for your loved ones to gain access.
Planning for digital assets is just as important as planning for physical and financial assets. By taking these steps, you can ensure your digital legacy is preserved and managed according to your wishes.
We can help you get started.
Contact a member of your Central Trust team for a complimentary Digital Asset Inventory form today or use the button below to download the PDF version.
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