When most folks think about digital assets or digital property, they think about cryptocurrencies, non-fungible tokens (NFTs), and other innovative technologies making headlines these days. Such items alongside avant-garde ideas like Mark Zuckerberg’s metaverse appear poised to change our daily lives and so it makes sense that they quickly come to mind. Digital assets encompass much more than Bitcoin and the like, though, and have been around for far longer. Anyone with a computer connected to the internet has digital assets and so digital asset management is a topic that concerns everyone, not just those invested in the latest technological breakthroughs.
Digital Assets and Estate Planning
Your estate plan serves numerous purposes. It is a financial roadmap that steers you comfortably into retirement; it is a backstop that ensures you can afford long-term care should the need arise; it is a shield protecting you from incapacitating injury and, most importantly, it is a tool that ensures your loved ones’ well-being now and in the future. Financial inheritances play a role in achieving this latter purpose, but so does planning around sentimental items and leaving your affairs neatly ordered. This is where digital asset management comes in even for those who lead simple online lives.
According to the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), a digital asset is simply “an electronic record in which an individual has a right or interest.” This means your social media profiles, email, electronic banking information, loyalty program benefits, and online medical records all count as digital assets. Sometimes these items retain significant financial value—as in the case of an influential Instagram account—but most often they don’t and yet they are enormously important to your loved ones.
Social media profiles are today’s photo albums and personal diaries all in one. Email accounts contain memorable and often important correspondence. In an increasingly digital world, these digital assets attain increasing sentimental value. Moreover, electronic banking information and other access credentials for personal accounts are crucial for the loved one entrusted with executing your estate to successfully carry out their role.
Failure to include needed information and instruction on how to manage digital assets puts your family at risk of conflict and inhibits their ability to carry out your last wishes.
Accounting for Digital Property in Your Estate Plan
You account for digital property in your estate plan in the same way you would physical property: by working with an estate planning attorney to detail how they wish it to be disposed of, used, or managed. Doing this begins with taking inventory of all you own online.
Make a list of all accounts and profiles you maintain and record the login credentials for each. Next, determine what you wish to pass on, how you wish this to happen, and what should be done with the rest. Think both about assets you would like to preserve and about those that would be better forgotten.
It’s not uncommon for a person to maintain private accounts they do not wish to share and accounting for these often requires careful thought. You might, for instance, designate a person other than your estate executor to dispose of certain files. To accomplish this, they will need clear instructions and adequate information.
Laws related to digital assets and estate planning are shifting, sometimes contradictory, and variable by state. Properly planning for your digital assets thus requires counsel from an estate planning attorney experienced in the matter.To learn more about ensuring your digital property is as protected as any other property you own, do not hesitate to contact Polaris Law Group either by calling 636-757-3850 or using the contact form on our webpage.