Last week here on the blog we mentioned that, incredibly, over 63% of Americans don’t know what will happen to their digital assets when they die!
While federal law regulating access to digital property does not yet exist, Colorado is one of many states that has enacted the Uniform Fiduciary Access to Digital Assets Act. The Act defines a digital asset as “an electronic record in which an individual has a right or interest,” which includes:
- Social networking sites
- E-commerce accounts
- Photo sharing sites
- Music and video accounts
- Electronic access to store accounts, credit cards, bank accounts, etc
- Online gaming
- And more
How can you make sure all these digital assets are part of your estate plan?
1. Keep Login & Passwords In A Secure Location
You may choose to store this important information with an attorney, using an online storage service (like Everplans), or in a locked file cabinet or safe.
No matter which method you choose, make sure someone close to you knows where the plan is located and how to access it. This person might be your spouse, your adult children, or your personal representative or trustee. Give them your attorney’s name or the name of the online storage company you’ve used. You might tell them the location of keys or perhaps the combination to your safe, depending on the storage method you’ve chosen.
2. Create A Plan For Your Digital Assets
Depending on the details of your digital assets, your plans for each of them may vary.
You may decide to have some digital assets archived. Other digital assets might be erased, while still others should be given over to family members, close friends, or even business colleagues.
For each of your digital assets or accounts, specify how you’d like it handled. Note that there may be some conflicts between your wishes and some companies’ terms of service, but it never hurts for your Executor or loved ones to know what your wishes are.
If any of your digital assets have monetary value, you might leave instructions to handle them in a specific way. For example:
Digital assets that generate revenue might be transferred to people who can continue to manage the accounts.
Your credits, points, or cash values might need to be redeemed.
Any online stores you’re in charge of might need to be closed right away, shut down after every item is sold, or even transferred over to someone who can continue to manage the store.
For digital assets that generate revenue, give some thought to where the money is going, and who can access it after you’re gone.
3. Select Your Trustee, Executor Or Representative
When designating your trustee or executor for your digital assets, keep in mind that the information embedded in your digital assets can be highly personal and confidential.
You may choose to appoint the same executor for your physical and digital property, or you can select someone else to follow the wishes laid out in your digital estate plan. At the very least, this person can assist your Executor.
4. Make Your Digital Estate Plan Legal
Las, but not least, formalize your digital estate plan in a legally binding document such as your Will or a codicil to a Will. You can do this by specifying who your traditional Executor should work with to settle your digital estate. Then specify the location of your digital assets so that when the time comes, your Digital Executor can find and access your plan.
Never include your passwords or other access information to your other digital assets in your Will. Many people don’t realize that when you pass away, your Will transitions into a public document that anyone can read! A great solution to this is to refer in your Will to an additional document with all the necessary information necessary put your digital estate plan into action. You’ll be able to add to, change, and update the document without going through the process of changing your will.
Finalize Your Digital Footprint
These days, such a large amount of our personal and financial lives are online. If you don’t account for your digital assets in your estate plan, you run the risk of stranding your family or friends as they try to get access to your online accounts. Add your digital assets to your estate plan, and encourage your loved ones to do the same!
*Disclaimer: Citywide Home Loans does not provide financial planning services or any other service apart from lending. You should always consult with your legal, tax and financial advisors to determine which strategy is the most suitable for your specific circumstances.