Most people begin the estate planning process with very clear priorities. Their main objective might be to protect family members, such as dependent children. They may also want to plan for the possibility of medical incapacity. Those thinking about their legacy and the financial support of their loved ones after their passing often focus on physical assets and financial resources.
However, there’s another category of property that they might overlook. Digital assets have become commonplace. People purchase online storage for important documents and photographs. They maintain a presence on social media.
They may even hold digital investments, including web domains, non-fungible tokens (NFTs), cryptocurrency and other digital resources. They may have bank accounts associated with digital financial institutions for which there is no physical location or printed statement available. Addressing digital assets is a crucial aspect of modern estate planning. How do people address their digital holdings in an estate plan?
By identifying those resources
The first step toward properly addressing digital assets is to create a comprehensive inventory of those resources. Otherwise, family members may not know how to locate those assets during estate administration.
Providing a comprehensive list, including login information such as passwords and usernames, is important. That way, family members know what digital assets they have to secure and address during a state administration.
By choosing beneficiaries for valuable resources
People can designate beneficiaries to inherit assets including cryptocurrency or websites that they own. They can also potentially file transfers on death designations for digital bank accounts.
That way, their resources do not pass through probate court but can instead transfer directly to a beneficiary of their choosing. Including digital assets in a will facilitates the proper distribution of those resources when the owner passes.
Designate someone to take control
Many social media platforms offer memorialized accounts when an individual passes. However, it may be necessary for testators to designate someone for that responsibility in writing. Otherwise, the personal representative administering their estate may have to take control of their social media accounts.
They may also need to name someone to find and share their saved memories online. Particularly when an individual has a subscription service for digital storage, they need to clearly designate someone to access and download what they store online or risk the company eventually eliminating their storage due to a failure to pay the subscription fee.
Bringing a list of digital assets to an estate planning appointment can be a smart move. Individuals creating or updating an estate plan may need to address their digital resources if they have not already done so.