Have a Facebook Account? You Need a Digital Assets Estate Plan
When you die, what will happen to your Facebook account? Gmail account? Digital photos? With so much of our lives lived online, digital assets estate planning has become imperative.
Yet like much of estate planning, people often delay codifying what they want to be done with their virtual assets, putting it off until “tomorrow.”
Tomorrow will surely come, and it can help our loved ones (and our peace of mind) to have an estate plan. This article covers steps in creating a digital assets estate plan (though you should always talk with your attorney to make sure your plan follows your state’s laws).
Start with a Digital Assets Inventory
An inventory will help you understand the full range of your virtual assets (you may be surprised by how much you have online!). It will also make it easier for the person managing your digital estate to locate your assets.
Your assets may include:
Email accounts
Website domains
Blogs
Social media accounts (e.g., Twitter or LinkedIn)
Online photographs
Credit card rewards
Cryptocurrency (e.g., bitcoin)
Nonfungible tokens (NFTs)
… and the list goes on!
To help make sure you don’t overlook anything, consider using one of the digital asset inventories available online.
As you locate each asset, include how your estate representative can access it, such as usernames, passwords, and answers to security questions. You likely use two-factor authentication with some of your online accounts. If that authentication includes the use of your cellphone, make sure your executor has access to your phone and PIN after you pass.
You can include your account login details in the inventory document. Alternatively, you can use the document as a guide but place your information elsewhere, such as an online password management system like Dashlane or LastPass.
Store your digital estate information in a secure location, perhaps with your estate planning attorney or financial advisor or in a home safe.
Name Your Representative
You’ll want to check with your state laws governing the disposition of digital assets. Here in California, the Revised Uniform Fiduciary Access to Digital Assets Act authorizes your appointed trustee to access and manage your digital assets and electronic communication.
Without a representative, your family may find it difficult to access your accounts. Companies’ terms of service will likely protect your privacy and could bar your loved ones from managing your online assets.
Make sure your representative is tech-savvy enough to navigate all your online accounts. They should be someone you trust with your personal information and assets. You’ll want to tell them how they can access the inventory after you pass so they can start the process of passing on the assets, archiving them, or deleting them according to your wishes.
Get Your Estate Planning Attorney Involved
Your estate planning attorney can properly incorporate your digital assets estate plan into your overall plan. And if you don’t already have an estate plan, now is a great time to start one!
Your attorney will know how to formalize your virtual assets estate plan. Because your will is a public document, they will likely recommend a strategy such as a codicil. This will help avoid putting any sensitive information like passwords in the will that leaves your estate vulnerable to identity theft.
Update Your Inventory Regularly
Your inventory is only as useful to your digital executor as its accuracy. And in the age of regularly changing passwords, your list of digital assets can quickly get out of date.
Consider updating your inventory as you make changes to your digital accounts. Making the process immediate means less chance of an update slipping through the cracks, and your fiduciary will have an easier time managing your digital assets as you wish.
Talk to Your Advisors
You probably will have questions. Estate planning affects other financial areas, such as taxes and investments, so it’s important to get guidance from professionals with expertise in your needs. Lean on your attorney and financial advisor.
Your financial advisor can play a key role in integrating your physical and digital estate plan into your comprehensive financial plan. They can also work with your attorney to make sure any action steps, such as titling of assets, are completed.
These tasks are some of the responsibilities our fiduciary wealth management firm in Roseville and Folsom, CA, often helps manage as part of the financial planning we provide. Schedule a complimentary, 15-minute call with a fee-only, fiduciary financial advisor today to discuss your personal situation.
This material was prepared by Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax or legal advice.
Parkshore Wealth Management is a family-owned, independent, fee-only Registered Investment Advisor serving the greater Sacramento area with an office in Roseville, CA. We partner with financially responsible individuals and families who are eager to take positive steps that will allow them to use their money to build the life they desire. The firm is led by Harold Anderson, CFP®, and Daniel Andersen, CFP®, both members of NAPFA, the country’s leading professional association of fee-only financial advisors.