Digital Assets: The Hidden Part of Your Estate

Digital Assets: The Hidden Part of Your Estate

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If you were to pass away tomorrow, would your heirs know the passwords to access your computer or smartphone? Or, for that matter, would they know how to access your email accounts or the Amazon.com or iTunes shopping accounts you’ve set up? Would they know how to shut down your Facebook account, or would it live on after your death?

These questions are part of a new category of estate planning concerns that can leave executors with little guidance or recourse to see your wishes handled. This list includes email accounts, social media platforms, websites and blogs that you manage and pretty much anything stored on the cloud. These digital assets are often more complicated to pass on at someone’s death than stocks, bonds and cash. A patchwork of differing state and federal laws, along with constantly changing internet platforms, have made it difficult to adequately plan for future changes. (For related reading, see: Why You Need to Find the Right IRA Beneficiary.)

Estate Planning in the Digital Age

In addition to a recommending having a strong set of estate documents, clients should consider maintaining a private letter of instructions and comprehensive list of information for their executors. But due to rapid change and security concerns, this can be an insufficient solution for passing digital assets. The need for a digital executor will only increase as more of our lives is accessed and stored on the internet, and planning ahead will benefit everyone.

To help the executor navigate issues with digital assets, online platform Everplans recommends that you share your logins and passwords with a digital executor. This tool can help streamline the executor’s ability to carry out your plan for your digital assets.

If the account or asset has value (like airline miles or hotel rewards programs; domain names) these should be transferred to specific heirs—and you can include these bequests in your will. Other assets should probably be shut down or discontinued, which means your digital executor should probably be a detail-oriented person with some technical familiarity. (For related reading, see: Estate Planning: 16 Things to Do Before You Die.)

The site also provides a guide on shutting down accounts. For example: your executor, with lawful access to your Facebook login credentials, may either shut down or memorialize your account—keep it open, but freeze it from future participation—depending on your wishes. Without this information, that person would have to submit your birth and death certificates and proof of authority under local law that he/she is your lawful representative.

The point here is that even if you know who gets your house and retirement assets if you pass away, you could still be leaving a mess to your heirs unless you provide a clear path for your digital assets as well. (For related reading, see: Estate Planning: Which Assets Are Best to Leave to Your Family.)

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Eleanore

Eleanore

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