Planning for Your Digital Assets: An Essential Part of Modern Estate Planning
Not too long ago, most important documents like tax records, bank statements, and family letters were kept in physical filing cabinets. A simple, “If anything happens to me, you’ll find everything important in there,” was enough. Today, however, the landscape has drastically changed with the rise of digital communication, online banking, and social media.
In fact, studies show that 92% of American children have a digital footprint by the age of two. As more services move online and statements go paperless, including your digital assets in your estate plan is no longer optional—it’s essential.
What Are Digital Assets?
Digital assets encompass everything from electronic financial statements and scanned documents to online accounts like Facebook, blogs, email, and digital photo collections stored on cloud services. These assets are often protected by passwords and encryption, making them inaccessible unless proper arrangements are made.
Without a plan, your loved ones or estate administrators could lose access to valuable and sentimental digital records, which could result in a loss of personal and financial data.
How to Protect and Plan for Your Digital Assets
Protecting your digital assets is similar to the traditional estate planning process, but it involves a few additional steps:
Use Trusted Tools
Many platforms offer tools to help you assign a trusted individual to manage your accounts. For example, Google provides an Inactive Account Manager, which allows you to select someone who can access your data after a set period of inactivity. Other tools like 1Password and LastPass securely store all your account credentials in one place, allowing your loved ones to access your digital life with a single password.
2. Create a Digital Inventory
At a minimum, create a list of your online accounts, passwords, PINs, and other relevant information. Store this inventory in a secure location and let a trusted family member or executor know how to access it. Note: Avoid storing this information in an unprotected file on your computer. If you must store it digitally, password-protect the file and share the password securely with your chosen successor.
3. Consider the Value of Your Digital Presence
Many people own websites, blogs, or e-commerce accounts that generate income. If you want these to continue after you’re gone, leave clear instructions on how they should be managed. If you have digital assets like scanned family photos, personal writings, or creative projects, include these in your estate plan. Mark important files with a “Do Not Delete” label and include them on your digital inventory.
4. Why Digital Estate Planning Matters
Arizona, Texas, and Utah have adopted laws related to managing digital assets after death. These laws allow you to legally designate someone to handle your digital property, and it’s crucial to understand how they apply in your state. For instance, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) governs digital estate matters in all three states, making it easier for designated individuals to access your accounts.
Taking proactive steps to organize your digital assets now will save your family time, stress, and potential legal complications later on.
If you’re in Arizona, Texas, or Utah and want to discuss digital estate planning, feel free to contact us for a free consultation. We’re here to help you ensure all aspects of your estate, digital and otherwise, are fully protected.
Additional Disclaimer: The content on this blog is for informational purposes only and is not intended to create an attorney-client relationship. For personalized legal advice, please contact our office to schedule a consultation.