Estate planning for the digital age: Tips for success

Does your estate plan include digital assets?

Technological innovations have had a major impact on our lives. They have changed everything from how we make a phone call to how we operate our vehicles. It makes sense that these advances would also change how we manage our estate.

These advances impact estates in many ways. Many estates contain different types of digital assets, often password protected. These passwords have increased in complexity in an effort to combat the constant threat of getting hacked. But how do we ensure we are protecting our assets from outside hackers and not keeping the assets from our loved ones when they may need those most? The following can help.

First, it is important to know which assets qualify as digital assets. Specific assets to take into consideration within this niche include:

  • Business accounts. Those with business interests likely store information on a computer and often make use of online financial accounts. This can also include important URLs or websites. An estate plan should provide information about renewing the URL if it is an important part of the business.
  • Financial accounts. A number of financial accounts are accessible only through the Internet. This can include banking accounts and bill paying services for basic amenities as well as subscriptions.
  • Email and social media. Gaining access to email accounts and social media sites can be extremely important. Businesses may rely on communications through these methods and files may be stored within these sites. Even those set up for personal use have value within the estate and should be properly accounted for within an estate plan.
  • Digital currency. One of the more recent types of digital asset to take into account is digital currency. Bitcoin, for example, can be very difficult to track down if not properly managed. Just how to manage these assets continues to be a point of contention. Some recommend the use of a private key or password storage system to help others gain access in the case of an emergency.

Identification of digital assets within our estate is the first step towards proper management. The next step involves accounting for these assets within the estate plan. Digital assets are fairly new and the laws surrounding how to navigate the transfer of these assets are behind. This can mean that heirs are left with a difficult battle to gather this information if it is not properly accounted for within an estate plan.

Digital assets are just one of many areas of an estate to take into consideration when putting together a plan. An estate plan must be tailored specifically to the creator's estate. A generic plan is more likely to neglect assets like the digital assets noted above. An attorney experienced in estate planning matters can better ensure all assets are accounted for within a comprehensive plan.