Whether it is email accounts, online banking, or social media, we now live in an age where much of our lives are stored and managed digitally. While many people adequately plan for their physical and financial assets, digital assets are often overlooked in the estate planning process. Creating a digital asset plan protects your online legacy and assists your trusted loved ones in managing important accounts when needed.

What Exactly Are Digital Assets?

Digital assets is a broad term covering many different types of “assets,” but for purposes of this blog, they are personal information belonging to an individual that is stored electronically. These can include email accounts, social media profiles, online banking and investment accounts, cloud storage accounts, domain names, digital wallets, and many more.

Though many digital assets hold financial value, many can simply hold sentimental significance to an owner. Regardless of content, these assets often represent a crucial part of a person’s legacy and deserve proper protection.

Why Is It Important?

Many digital accounts are protected by passwords, PIN’s, security questions, or multi-factor authentication. While these protections improve security of the assets, they also create challenges for family members, executors, trustees, and agents who are acting under the power of attorney.

Without the proper planning your loved ones may encounter challenges:

• Accessing important financial information
• Managing online bill payments
• Recovering family photographs and videos
• Preserving business records
• Closing or transferring online accounts
• Preventing identity theft after death

A well prepared and comprehensive digital asset plan can help reduce these challenges your loved ones may face and ensure all your wishes are respected and carried out.

What You Can Do:

So, now you understand what “digital assets” are, and why having a plan for them is so important. But what then? Where sort of steps can you take to put a plan together for your digital assets?

1. Create a Digital Asset Inventory

The first step is to identify the various digital assets you own. This inventory should include:

• Electronic devices (phones, tablets, laptops, desktop computers)
• Email accounts
• Financial accounts
• Social media accounts
• Cloud storage services
• Online subscriptions
• Rewards and loyalty programs
• Business-related accounts
• Websites and domain registrations

For each of these accounts or devices you will want to compile:

• Account name
• Username
• Purpose of the account
• Password manager information
• Multi-factor authentication method
• Location of recovery information

2. Proper Password Management

Strong password creation and management are crucial to protection of digital assets. We all know the benefit of strong passwords that evolve overtime. But how best to stay ahead of changes to technology, security, while also providing your trusted decision-makers the access they need when the time comes?

• Password managers allow users to store unique and complex passwords for each of their accounts. This reduces risks of repetitive passwords and maintains security.
• Multi-Factor authentication requires additional verification before access to assets is granted.

Legal Authority Matters:

Even if loved ones are aware of digital assets, they may not have the legal authority to access them. Estate planning documents ensure that trusted individuals are authorized to manage digital assets when it is necessary.  Depending on circumstances these documents may include:

• Powers of attorney
• Revocable living trusts
• Wills
• Assignments of digital assets
• Digital asset authorization provisions

For example, some individuals choose to formally assign their digital assets to a trust. This assignment means their trustee has authority to access manage, preserve, transfer, or delete digital accounts as needed on behalf of the account holder.

Because of continuously evolving laws, it is important to work with qualified legal counsel when incorporating digital asset provisions into an estate plan.

We Are Here to Help

Protecting your legacy in a world filled with digital assets doesn’t have to be confusing. We’re here to help you make informed decisions, organize what matters most, and ensure your wishes are carried forward. Nielsen Law PLLC Provides family-focused estate and business planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information, and to learn about our firm, please contact us to learn how.