If you are like many people today, you conduct a good part of your business and personal life electronically. These activities generate valuable “digital assets” — which you may store online or on a variety of computers and handheld devices.
Without addressing these assets in your estate plan1, your family or other representatives may not have the ability to access them without going to court and, in some cases, may not even know they exist.
What are Digital Assets?
Your personal digital assets include email accounts, online bank and brokerage accounts, online photo galleries, digital music and book collections and accounts with social networks like Facebook, LinkedIn and Twitter.
For a business, digital assets might include websites, domain names, client and other databases, electronic invoices, email correspondence and a variety of important records and documents that are stored electronically on the company’s servers or on a Web-based storage site.
Why is Estate Planning for Digital Assets Important?
Traditionally, when a loved one dies, family members go through his or her home to look for personal and business documents, including tax returns, bank and brokerage account statements, stock certificates, contracts, insurance policies, loan agreements, and so on. They may also collect photo albums, safe deposit box keys, correspondence and other valuable items.
Today, however, many of these items may not exist in “hard copy” form. Unless your estate plan addresses these digital assets, how will your family know where to find them or how to gain access?
Even if your family knows about a digital asset, they need to know the username and password to access it. If they don’t have that information, they have to get a court order to access the asset, which can be a time-consuming process, and delays can cause irreparable damage, particularly for businesses. If your representatives lack access to your business email account, for example, important requests from customers might be ignored, resulting in lost opportunities.
How to Include Digital Assets in Your Estate Plan
If you have digital assets you want to incorporate into your estate plan, consider the following techniques:
- Inventory your digital assets. Make a list of all your digital assets, including any computers, servers, handheld devices, websites or other places where you store these assets.
- Create a digital asset access strategy. Talk with your estate planning advisor about strategies for ensuring that your representatives have immediate access to these assets. Do not include passwords or other confidential information in your will. A will is a public document and amending your will each time you change a password would be expensive and time consuming.
- Write a letter. You can write an informal letter to your executor or personal representative listing important accounts, website addresses, usernames and passwords. The letter can be stored in a safe deposit box, with a trusted advisor or in some other secure place.
- Establish a master password. Create a master password giving your representative access to a list of passwords for all your important accounts, either on your computer or through a Web-based “password vault.”
- Use online planning services. Use one of several online services designed for digital asset estate planning.
Ownership of Digital Assets
It also important for your estate plan to deal with ownership issues involving digital assets. Considering using your will or a trust that provides the trustee with the authority to manage digital assets and transfer them to your beneficiaries according to your wishes.
To incorporate your digital assets into your estate plan, contact a Fifth Third Bank advisor.