Most people understand the importance of having an estate plan in place, but many overlook an essential estate planning component that has grown increasingly important over the last few years: making a plan for digital assets. Digital assets are any content owned by an individual and stored electronically, including photos and videos, purchased music, cryptocurrencies, credit card rewards, travel miles, email and social media accounts, blogs, web domains, financial and investment accounts … the list goes on and on.
Without a plan in place, it can be incredibly difficult for your loved ones to access your digital assets, which is why it is important to incorporate them into your overall estate plan. Without a plan in place, your loved ones could face the following challenges when trying to access your digital assets:
- Data encryption –Data encryption is used to protect accounts from hackers, but it can also make it difficult for authorized individuals to access your digital assets without the necessary login information.
- Passwords –If you do not share your account passwords, your family may struggle to gain access to your computer, email, accounts, etc.
- Fraud and identity theft protections – Federal and state laws that provide safeguards against fraud and identity theft can also make it difficult for unauthorized users to access computers and other personal electronic devices. Without proper legal authority, your loved ones may face legal challenges in accessing your digital assets.
The following tips can help ensure your loved ones are able to access your valuable digital assets, should something unexpected happen to you.
#1 – Document your digital assets.
The first step is to make a list of all your digital assets and provide instructions for accessing them. Taking time to thoroughly inventory and document your assets helps ensure your loved ones do not face any roadblocks in accessing them. Be sure to include login information so that your designated heirs can access your assets in an emergency. Of course, it is absolutely vital that you store your login information in a secure location that only your loved ones can access.
#2 – Back up your data.
Cloud storage can be a simple and streamlined way to save digital assets, but it is important to also physically back up your data. Save your assets on a flash drive or external hard drive on a regular basis, and store this backup device in a secure location where only your loved ones can access it.
#3 – Update your legal documents.
Work with your estate planning attorney to incorporate your digital asset wishes into your overall estate plan. This may involve updating your will, powers of attorney and revocable living trusts. You may not want all your loved ones to have access to all your digital assets, so be careful to correctly designate which digital assets should be available to which heirs.
#4 – Use multifactor authentication.
Multifactor authentication adds another layer of protection to your digital assets. This security feature requires an additional piece of data in order to log in, such as the answers to security questions or an access code that is sent to your phone. Whenever possible, be sure to opt in to this important security feature.
#5 – Include legacy contacts.
Several digital asset providers, such as those that offer access to social media and photo/document storage, allow users to list legacy contacts. Legacy contacts are individuals who are authorized to access digital assets in the event the primary user has passed away or is incapacitated. If this option is available, it is wise to designate authorized legacy contacts on your accounts.
An important note: As you are updating your legal documents, remember to designate who has access to your digital assets, not how to access those assets. When you pass away, your will becomes a matter of public record. That means any login information included in your will can be viewed by anyone. Rather than including access information in your will, store your digital assets inventory in a secure location where your loved ones can access it.
If you could use some help making a plan for your digital assets, we would love to have a conversation. To learn more, please contact us.
