Digital estate planning is essential to comprehensive estate planning.

Technology is increasingly prevalent in daily life.

Remember when cell phones were used only to send and receive voice calls?

Now, the average cell phone is a pocket-sized computer that provides access to social media, email accounts, banking, games, and various other features.

With so much of life managed online, people have much to lose if their digital assets are compromised.

According to a recent Kiplinger article titled “Digital Estate Planning Guide: Get Your Digital Assets in Order,” digital estate planning is critical to protecting and preserving digital assets.

Failing to prioritize digital estate planning can place your assets at risk of loss or theft.

Throughout most of human history, property and valuables were largely tangible.

Whether picture albums or heirlooms, these items were pretty easy to identify, access, and distribute.

Digital assets are not nearly as straightforward.

Email accounts, recordings, photographs, cryptocurrency, online banking accounts, investment accounts, subscriptions, intellectual property, frequent flier miles, social media profiles, and documents stored online are all digital assets.

Because they are stored digitally, one cannot simply glance around the house and know what needs to be passed to heirs.

An organized and detailed digital estate plan can protect these assets from identity theft, loss, or family disputes.

What steps should one take?

The first step is to identify and list all of your assets.

You must include URL addresses, login credentials, and account numbers.

Do some of your accounts have two-factor authentication?

If yes, you must include this information so your loved ones or agent can understand the steps for getting a retrieval code.

While this may be a long and tiresome process for you, it will be nearly impossible for your executor to try to find this information after you have died unless you communicate it.

If your executor cannot identify or access your digital assets, these memories and valuables will be lost forever.

Yikes!

After creating this list, you should identify and name a trusted person to be your digital asset estate executor.

Sometimes, this may be your primary executor of your last will and testament.

If your primary executor is reliable and responsible but not tech-savvy, you may want to choose a second person to help with the digital assets specifically.

Work with your estate planning attorney to identify them in your last will.

Lastly, you must consider and answer various questions about how you want your digital assets handled and distributed.

Do you want your accounts to be deleted with no backup?

Perhaps you want an executor to download your information or documents and store them on a hard drive.

Do you have guidelines for the use of valuable assets?

If you have cryptocurrency, you may want to transfer the asset directly or convert it to money and then distribute it.

Do you have sensitive or private digital information?

Consider whether you would like your executor to delete the information or whether you would need to transfer or delete it before you die.

As you plan your digital estate, share your wishes with your loved ones and executor.

If you already have a digital estate plan, review and update it regularly.

Because states have their own laws governing digital assets, work with an experienced estate planning attorney to ensure your wishes comply with laws and regulations and your comprehensive estate plan.

This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.

Reference: Kiplinger (March 14, 2024) “Digital Estate Planning Guide: Get Your Digital Assets in Order”