Estate Planning for Digital Assets
You may have an estate plan in place but have you considered estate planning for digital assets you own? Our estate plans need to keep pace and reflect our ever changing digital world. The digital age has ushered in an online and paperless society. With much of our life dedicated to the internet, we all find ourselves with multiple online accounts. Online accounts are amorphous, they include, but are not limited to, online brokerage accounts, retirement accounts, credit cards, stocks, student-loan or utility statements, social media accounts, blogs, and email addresses.
These accounts are our property, they are part of our estate. Consequently, when family members and individuals die, they leave tangible property and, now, digital property.
Recently, a common question has been – how does an executor sort through the decedent’s digital accounts and possessions? Often, the executor does not even know that these digital accounts exist, let alone have any clue as to how to access them. Individuals simply keep these accounts and their passwords to themselves and fail to share even minimal information with their executor. This secrecy only adds to the headache and heartache of administering a loved one’s estate.
The solution: estate planning for your digital assets. As with all estate planning issues, proper and prudent planning is the solution. There are simple steps that all individuals can take to properly plan for our digital world.
Steps to Estate Planning for Digital Assets
Estate Planning for Digital Assets Step 1: You must have an Estate Plan.
In order to protect your digital assets, you should have a will, trust, and power of attorney. These estate planning devices enable you to appoint a fiduciary (an executor or trustee or agent).
Estate Planning for Digital Assets Step 2: Incorporate a Digital Asset Clause or Provision
A “Digital Asset” clause or provision will authorize your fiduciary to access and manage your digital assets and accounts. For instance, such a clause will empower a fiduciary to access your online bank accounts to make payments or close an account in the event of incapacity or death. This clause can also be tailored to a client’s wishes. For instance, if a client does not want to allow their fiduciary to have specific authority over certain digital assets, the will or trust agreement can be altered in accordance with the client’s wishes.
Estate Planning for Digital Assets Step 3: Organize a List of Your Digital Assets
After properly updating or creating a new estate plan to reflect your digital assets, you need to, at a minimum, to identify what your accounts are and where they can be accessed. Additionally, if you feel comfortable, you should (safely) leave the passwords to the accounts with your fiduciary. Your executor should have one document with a list of your assets and passwords.
What you can do? Contact the estate planning attorneys at Puff & Cockerill to help implement a proper and adequate estate plan that covers and protects your digital assets. Your estate plans should reflect our ever-changing world. Online accounts are becoming the norm and technology will continue to expand in our lifetimes. When it comes to planning your estate, there is no better time than now.