Digital Assets and Estate Planning: What You Need to Know
[Please note: this post and all other posts should not be relied upon as legal advice, please contact us to ensure accurate, up to date, and timely legal advice and representation before taking any actions.]
Digital Assets and Estate Planning: What You Need to Know
As our lives become increasingly digital, more and more of our assets exist online—from social media accounts to cryptocurrency and digital files. However, many people overlook these digital assets when creating an estate plan. Without proper planning, your loved ones may struggle to access or manage your digital property after you’re gone. Including your digital assets in your estate plan ensures they are protected and distributed according to your wishes.
What Are Digital Assets?
Digital assets are any online or electronically stored items that hold value, both financial and sentimental. These can include:
Online Financial Accounts: Bank accounts, investment accounts, PayPal, Venmo, and other digital payment platforms.
Cryptocurrency: Bitcoin, Ethereum, and other forms of digital currency held in online wallets.
Social Media Accounts: Facebook, Twitter, Instagram, LinkedIn, and more.
Email Accounts: Personal or business email accounts containing important communications.
Online Business Accounts: Websites, domain names, e-commerce stores, and other online business ventures.
Subscription Services: Streaming services (Netflix, Spotify), cloud storage (Google Drive, Dropbox), and other digital subscriptions.
Photos, Videos, and Documents: Personal or professional files stored on cloud platforms or on personal devices.
These assets may not have a physical presence, but they can hold significant value, both financially and emotionally. In some cases, failure to include them in your estate plan could lead to a loss of value, legal complications, or the inability for your loved ones to access important information.
Why Digital Assets Need to Be Part of Your Estate Plan
Unlike traditional assets like real estate and bank accounts, digital assets are often protected by strict privacy laws and terms of service agreements. Without the proper documentation, your executor or loved ones may not have the legal authority to access or manage these assets after your death. Including digital assets in your estate plan helps ensure that:
Your Digital Property is Protected
Whether it’s a valuable online business or personal photos stored on social media, your digital assets should be treated with the same level of care as your physical property. Proper planning allows for the protection and distribution of your digital assets according to your wishes.Your Loved Ones Can Access Your Digital Accounts
Many online accounts require usernames, passwords, or special access codes. Without this information, your executor may struggle to access your accounts or recover digital assets. Providing clear instructions can help your loved ones avoid legal obstacles and time-consuming processes.Legal Compliance
Laws surrounding digital assets are still evolving, and privacy protections can make it difficult for family members to access digital accounts without proper authorization. Including digital assets in your estate plan ensures that your executor has the legal authority to manage them.
Steps to Include Digital Assets in Your Estate Plan
Create a Comprehensive Inventory
Start by making a list of all your digital assets, including usernames, passwords, and security questions. This list should cover all your important online accounts, from financial platforms and email addresses to social media accounts and cloud storage services.For added security, consider using a password manager to store and manage your login credentials. Password managers keep your information secure and can provide easy access to your executor when needed.
Appoint a Digital Executor
In some states, you can designate a digital executor—a person responsible for managing your digital assets after your death. Pennsylvania law does not specifically recognize digital executors, but you can still include instructions for your traditional executor or trustee to manage your digital property.Be sure to choose someone who is tech-savvy and understands the importance of handling digital assets. This person should also be trusted to follow your wishes and protect your online privacy.
Provide Access Instructions
While it may be tempting to include usernames and passwords in your will, it’s better to keep this sensitive information in a secure location, such as a password manager or a separate letter of instruction. Your will becomes a public document during probate, so avoid including private details that could be misused.Instead, leave clear instructions for your executor on where to find your digital asset inventory, login credentials, and any other necessary information. This will help ensure that your digital assets are easily accessible without compromising security.
Address Your Social Media Accounts
Each social media platform has its own policies for handling accounts after someone passes away. For example, Facebook allows you to designate a legacy contact to manage your memorialized account, while Google has an Inactive Account Manager tool to specify what happens to your data after a period of inactivity.Review the policies for each platform and decide how you want your accounts to be handled after your death. Whether you want your accounts memorialized, deleted, or passed on to a trusted individual, make your wishes clear in your estate plan.
Plan for Cryptocurrency and Other Digital Assets of Financial Value
If you hold cryptocurrency, it’s essential to include detailed instructions for accessing your digital wallets. Unlike traditional bank accounts, cryptocurrency transactions are irreversible, and without proper access, your digital currency could be lost forever.Make sure your executor knows where to find the keys or passwords to your digital wallets, as well as any relevant backup codes or two-factor authentication details.
Review and Update Regularly
Digital assets can change frequently, whether it's new online accounts, subscription services, or changes to existing platforms. Make it a point to review and update your digital asset inventory and estate plan regularly, especially as you add new accounts or make changes to your login credentials.
Conclusion
In today’s digital world, it’s important to account for all aspects of your estate—including your digital assets. By creating a comprehensive plan, appointing a trusted individual to manage your digital property, and leaving clear instructions for your executor, you can ensure that your digital legacy is protected and your loved ones are spared unnecessary stress.
If you’re unsure where to start, working with an estate planning attorney can help ensure that your digital assets are properly addressed in accordance with Pennsylvania’s laws. Please consider reaching out and getting in touch with our office if you have questions or concerns that we may be able to address specifically.