When you think about planning for death, the most apparent assets to plan for include personal property, real estate, and investments. But you probably don’t think about your digital assets – and they deserve your attention as well.
A digital asset is an electronic record which an individual has a right to or an interest in. This includes files or photos saved on computers, smart phones or tablets, as well as email accounts, social media accounts, contact lists, calendars, texts messages, music, cryptocurrencies and more. 1
It’s important to plan for these digital assets. Some estate planning clients may prefer to focus on assets that have obvious monetary value, but digital assets may also have tangible worth along with their emotional value. Cryptocurrency, PayPal or other digital accounts, loyalty rewards programs and IRS e-filings are all digital assets. Establishing a strategy for your digital assets can prevent online account information from being stolen. Imagine the losses to your estate: financial (a hacker accessing your bank account via online bill payment) or emotional (social media accounts overrun with inappropriate photos and virus-spreading spam while your family and friends are still grieving). It’s better to address these issues now than leave no instructions and risk your loved ones having to handle these challenges when you are gone. 2 You can direct that your digital assets be transferred, preserved, or destroyed per your instructions.
New estate laws take digital assets into account. Most states now have passed the Uniform Fiduciary Access to Digital Assets Act (UFADAA).A revised version of this Act was passed in Indiana in 2016. It allows a decedent’s personal representative or trustee to access and manage digital assets and electronic communications.3 This law allows an executor to treat digital assets like any other asset the deceased owned. But unlike a physical object, digital assets are more complicated because each digital platform has its own set of rules.
So, what should a client do? Disposing of or saving digital assets requires planning, especially social media accounts. Make sure the executor of your estate is technologically astute, or appoint a second executor just to handle your digital assets. Each social media platform has its own policy for memorialising or disposing of accounts, and they often require certified copies of death certificates. 4, 5
When planning for your digital assets, you should include a digital asset map for your executor. List all of your digital assets and all accounts’ usernames and passwords. This document must be stored in a secure way that can be given upon your death to your executor. Your executor does not need to see this information until you pass away or are unable to maintain your digital profiles and accounts. You can even leave instructions for your executor to delete all assets without anyone viewing them.
For additional information on this topic, please reach out to your estate planning attorney. If you need a referral to an estate planning attorney, please give the Financial Plans & Strategies team a call at 317-882-7675.