Digital estate planning should be a top priority for everyone, regardless of age or circumstances. Technology’s expanding role in people’s lives needs estate planning for digital assets.
It can be emotionally draining just to get started on the process of structuring an estate, much alone all the legal details involved. However, this is only sometimes the case. Creating a digitally trusted estate plan does not include avoiding unpleasant possibilities. The goal is to eliminate anxiety for you and others you care about.
Real estate, financial assets, and collectibles are typical targets of an estate plan’s attention. But in today’s technological world, it’s crucial to account for your digital possessions. Everything we hold in the digital realm is an asset. To protect all this for our loved ones and us, we will need the help of lawyers.
Legal Considerations for Digital Assets
In the event of death, one’s digital assets should be handled by the person designated as the “digital executor” in the will. An agent is the authorized representative named under a power of attorney estate planning (POA).
Remember that the term “digital fiduciary” can be applied to any circumstance. A federal law is needed to control the designation and duties of a digital fiduciary. However, this might change if email and social media companies focus more on collecting and sharing user data.
At the start of 2019, around 30 states passed legislation on this topic. Many of these jurisdictions have passed laws similar to the Uniform Fiduciary Access to Digital Assets Act. Several states have passed their legislation, and others will probably follow suit.
DIY estate planning could be risky due to the legal aspects involved. You might end up saying what you don’t want in your will. Estate planning attorneys can notice and correct legalese errors that even the most thorough review might miss. Your estate planning lawyers may examine your assets and help you identify which ones need specific wording in your forms. They may also assist in making sure that benefits are distributed uniformly.
You may save time and money by settling these outstanding matters before probate. You can also enhance the possibility that your wishes will be followed.
What Are Digital Assets?
A digital asset is any piece of information that exists only in digital form. You can save valuables in digital form on your computer and mobile device. The following are all examples of digital assets:
- Banking data that can be accessed online
- Social media accounts
- Websites and blogs
- Affiliations with subscription services
- Email accounts
- Online backup solutions
- Online store accounts
- Utility accounts
- Memberships in the Gaming Community
Online services need a login and password. These accounts usually require you to agree to terms before using them. Some online service providers limit access to account holders only. It might help safeguard your online accounts. But it may make it hard for loved ones to access your data after you die.
After you die, most internet service providers won’t provide your loved ones with your login information. Online service providers may choose to deactivate or cancel user accounts after a specific time of inactivity. If this occurs, your loved ones might be unable to access your digital assets.
Challenges to Digital Interaction
Digital assets are property and may be gifted to heirs or beneficiaries under an estate plan. Social media, search engines, and digital property laws evolve.
Non-owners may have problems accessing digital assets and other financial data due to these. The deceased’s family faces four major obstacles when trying to access their digital assets and personal data. These are listed below:
Your family can’t use your phone, computer, online accounts, or other cloud-based items without your passwords.
Some passwords are complicated to crack. However, it is easy for professionals to crack your laptop or tablet password.
2. Data Encryption
Information kept digitally may be encrypted for added safety. Encrypted data in a file, device, or cloud is almost always only decodable with the right password.
3. Data Protection Laws
Online account service providers cannot disclose your digital communications without approval under federal data privacy rules. This implies that your data may be protected on social media platforms or other businesses until you grant access.
4. Criminal Laws
State and federal laws prohibit computer system invasion and data theft. These policies protect consumers against fraud and identity theft. However, this may also make it impossible for surviving family members to access their loved one’s digital property and data.
Many issues remain unsolved as the law adapts to the internet. Your estate plan must allow your fiduciaries to examine key digital information.
How To Protect a Digital Estate Plan?
You can do several things to ensure that your loved ones have access to your digital possessions after you pass away. Some states have approved the Revised Uniform Fiduciary Access to Digital Assets Act to assist families. Leaving family members with instructions for accessing your online accounts is still recommended.
These instructions should be written out in a different document from your standard will. It is significant because when a conventional choice is presented to the court, it becomes available to the public. You don’t want everyone to know about your digital possessions and how to access them.
1. Make a List of All Your Digital Assets
A complete digital estate strategy starts with an inventory of all your digital assets. Typical digital assets include email and social media accounts.
Provide your family or the person you want to manage your digital assets with the login credentials for your online accounts and records. This data can be stored in a word processor or a password manager. If any of your login credentials change, be sure to go back and update this list.
2. Think About the Future of Your Digital Assets and Make a Plan
Managing your digital assets requires careful preparation. Custodial tools and service provider contracts may damage your digital legacy after death.
Research the rules and terms of your digital account managers. It will help you to verify that your digital assets are managed as you intend.
The rules of the account you registered may prohibit the transfer of some digital assets. Google and Twitter are two major IT businesses with ingrained, longstanding standards. What happens to your digital assets after you pass away is a topic covered by legacy policies.
For instance, Facebook memorialization function allows loved ones to keep an account alive. It allows the deceased user’s friends and family to continue to post messages and view photographs.
It is also recommended that you verify the safety of any websites you visit that deal with custodial matters. By using custodial technologies, you may give another person permission to use your digital assets after your death. You may use a Google tool to choose who you want to have access to your Google account after you die.
You should consider whether you want someone else to manage your revenue-generating accounts or if you want them closed. Do you want your blog or online presence to continue after your death, or do you want it taken down?
You may want a farewell message sent on your page. Specify your wishes for each account, and then name the person or people you want to implement them.
3. Allocation of Access
Once you have compiled a comprehensive inventory of your digital possessions, the next step is to plan for their distribution. You can save specific data and wipe out all traces of other data. Some close friends and family members may receive gifts of other assets instead.
Your chosen business partner should have access to your firm’s money-making assets and online accounts.
4. Designate an Executor
Your digital estate plan is only complete if you have named an executor for your digital assets. Digital executors carry out your wishes.
This operator will access all your online accounts and share or delete your digital assets. Your loved ones will benefit from the assistance of an attorney or reliable friend, both of which you are free to choose.
5. Ensure Your Digital Estate Documents Are Safely Stored
Your digital executor may only be able to carry out your desires if they can locate the instructions you left for them. Store all digital copies of your estate planning paperwork in a readily available and secure location.
You should tell your digital executor where they may locate the files. You should also save your digital estate plan form and other legal documents at home.
If you work with lawyers to create your digital estate plan, you may leave the files with them. You can create a digital estate plan on your own as well. So it’s up to you to decide whether you need legal or financial advice.
Due to the novelty of digital assets, the legislation governing them is developing fast. Discuss the above-mentioned measures you need to take with your legal counsel and keep in touch so your estate plan may evolve as the law and digital assets do. Finally, if your digital assets are considerable, you may select a commercial and legal executor.