- Estate Planning
- Probate
- 5 mins
In today’s digital age, our lives are increasingly intertwined with the online world. From social media accounts and digital photo collections to online banking and cryptocurrency wallets, digital assets have become an integral part of our personal and financial identities. However, when it comes to estate planning, many people overlook the importance of including these digital assets in their plans. In this legal blog post, we will explore why it is crucial to address digital assets in your estate plan and provide practical steps to ensure your online legacy is protected.
Understanding Digital Assets
Digital assets encompass a wide range of online and electronic resources. Some common examples include:
- Social Media Accounts: Facebook, Instagram, Twitter, LinkedIn, etc.
- Email Accounts: Gmail, Yahoo, Outlook, etc.
- Digital Photos and Videos: Stored on platforms like Google Photos, iCloud, and Dropbox.
- Online Banking and Investment Accounts: Access to your financial institutions' websites and apps.
- Cryptocurrency Wallets: Bitcoin, Ethereum, and other digital currencies.
- Online Shopping Accounts: Amazon, eBay, and other e-commerce sites.
- Digital Subscriptions: Netflix, Spotify, Peloton, and other subscription services.
Why Include Digital Assets in Your Estate Plan?
1. Access and Control: Without clear instructions, your loved ones may struggle to access and manage your digital assets. This can lead to the loss of valuable information, financial resources, and treasured memories. Ensuring that your usernames and passwords are included in your estate planning documents can significantly streamline the administration of your estate following your death. While many digital platforms have dedicated teams to help facilitate the transition or closing of an account, this process can be timely and add unnecessary hardship to your loved ones in managing and inventorying your digital assets after your death.
2. Legal and Financial Implications: Certain digital assets, such as cryptocurrency, can have significant financial value. Properly managing these assets ensures they are included in your estate and distributed according to your wishes. If nothing else, keeping an inventory of any assets that may be held outside of a typical financial institution and strictly online can help your loved ones in finding and accumulating your digital assets.
3. Privacy and Security: Leaving digital accounts unmanaged can lead to security risks, such as identity theft and fraud. Providing instructions for account closure or memorialization can help protect your digital footprint.
Steps to Protect Your Digital Assets
1. Create an Inventory: Start by making a comprehensive list of all your digital assets. Include account names, login information, and any relevant instructions. This inventory should be updated regularly as you acquire new digital assets or change passwords. Certain digital assets can be included in your residual estate, and left to specific people in a personal memorandum that you leave with your estate planning documents. This ensures that specific digital assets can be left to certain individuals, the same way that you may designate a tangible item, such as a watch, to a certain family member.
2. Select a Personal Representative that is familiar with your digital assets: The Personal Representative is responsible for collecting and inventorying the assets, determining and paying debts, filing tax returns, preparing accounts for the estate beneficiaries, filing documents with the Probate Court and distributing the estate assets to the parties named in your Last Will and Testament. For more information about the different parties involved in your estate plan, read our legal blog here. Ensuring that you help your Personal Representative track down your assets before you are gone can go a long way in streamlining the process of getting your assets to the proper beneficiaries.
4. Specify Your Wishes: Detail your preferences for each digital asset. For example, you may want certain social media accounts to be memorialized, photos to be shared with family members, or cryptocurrency to be sold and distributed. Often times these types of accounts will accompany the documents outlining your funeral arrangements, where you can outlines certain family photos or videos that you want included in your services. Be as specific as possible to avoid confusion.
5. Consult with an Estate Planning Attorney: Digital estate planning can be complex, especially with varying laws regarding digital assets. An experienced estate planning attorney can help ensure your digital assets are properly included in your overall estate plan and that your wishes are legally enforceable. At Lane, Lane & Kelly, we update all of our estate planning documents annually to keep up with changes in the law as the everchanging technology landscape shifts. This becomes especially important for any living documents such as a Durable Power of Attorney. Without the right language, you or a loved one may be blocked from managing or even opening/closing a certain type of online account if your living documents don’t provide for these powers. This makes consulting with an experienced Estate Planning Attorney that knows the law inside and out paramount in ensuring you and your family are taken care of.
Conclusion
Incorporating digital assets into your estate plan is essential in today’s interconnected world. By taking proactive steps to inventory your digital assets, appointing the right Personal Representative in your Will, and providing clear access instructions, you can ensure your online legacy is protected and your loved ones are spared additional stress during an already difficult time.
At Lane, Lane & Kelly, we understand the importance of comprehensive estate planning and have been helping individuals and families across the South Shore of Massachusetts for over 85 years. Contact us today or visit our office, conveniently located in Braintree, Massachusetts, to discuss how we can help you include digital assets in your estate plan and safeguard your online legacy for the future.
This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this blog you understand that there is no attorney client relationship between you and Lane, Lane & Kelly, LLP.
