While most people realize that estate plans should be created to help distribute physical property such as real estate or jewelry, there is a growing need to consider intangible property. The Internet is increasingly becoming the main storage of our financial lives.
A recent survey from Pew Research revealed that 51% of American adults bank online, and 32% bank using their mobile devices. With almost nine out of 10 Americans using the Internet, there is a strong need to include digital assets in estate plans.
As a recent article in the Wall Street Cheat Sheet titled “Estate Planning 101: Don’t Forget About Your Digital Assets” notes, digital assets hold both financial and sentimental value to family and friends, and this should be addressed in the estate planning and administration process. First you must find the person’s digital property and identify which digital property is valuable or significant. In addition, there are passwords, encryption, computer crime laws, and data privacy laws to deal with, any one of which can make it nearly impossible to do anything with the digital property.
In order to protect your digital assets, the Wall Street Cheat Sheet article recommends including them in a will or trust and designating a fiduciary to execute your wishes. It also recommends that you should add a provision in your estate plan granting your fiduciary access to your online accounts and data in the event of your incapacity or death.
Completing an inventory of your digital assets is the initial critical step in this process. Include usernames and passwords for your electronic devices, bank accounts, utility accounts, email accounts, insurance plans, and any other significant online accounts used frequently. Also, if there’s information you do not want disclosed to family and friends, you should give instructions in your estate plan on how that information should be handled. The will should contain only the instructions on where to find your usernames and passwords, such as a safe deposit box. The article reminds us that even social media websites such as Facebook should be included in your inventory list, if they hold sentimental value.
Think about all of the information you have stored online—plan ahead and talk to an estate planning attorney about digital assets and other estate planning strategies.
Reference: Wall Street Cheat Sheet (May 19, 2014) “Estate Planning 101: Don’t Forget About Your Digital Assets”