Digital Assets

What are digital assets and why you need to pay attention to them?

laptop with download arrow with digital assets written underneath surrounded by social media logos on a digital background

Estate planning attorneys in the 21st century are busy trying to keep up with technological advances. In today’s digital world, estate plans not only cover your financial accounts and physical tangible assets such as your house and jewelry, but they also cover your non-tangible digital assets.

What Are Digital Assets?

Digital assets are properties that are stored on digital devices such as smartphones, computers, laptops, and tablets. They encompass your online accounts and any information attached to these accounts. Studies have shown that there’s typically one email tied to at least 150 different online accounts and people, on average, have more than $100,000 in these digital accounts.

Examples Of Digital Assets

  • Email accounts: work, Google, Yahoo, Hotmail, Charter, Outlook
  • Financial accounts: Savings, Checking , 401k, IRAs, stocks, bonds, loans, insurance (life, home, car, health), cryptocurrency
  • Medical accounts: health history, immunization records, Epic health accounts
  • Social media and photo accounts: Facebook, Instagram, Google Photos, Google Drive, iCloud, Flickr, Twitter
  • Online subscriptions: Netflix, Hulu, Spotify, iTunes, Amazon, Youtube

Digital Assets and Privacy

With the increase of accounts going digital and paperless, the concern over one’s privacy has been the main issue companies and users grapple over. A whopping 70% of users want their online accounts and digital information to stay private after they pass away. Another issue is that it’s getting harder and harder for trusted family and personal representatives to track down their loved one’s assets without a paper trail. 34% of the population currently opt for paperless statements with that number only rising given how popular digital accounts have become.

How Do You Protect Yourself and Your Digital Assets?

Most, if not all, sites have a Terms of Services Agreement (TOSA) when you sign up for an account. These TOSAs specify what will happen to your account should you pass away. Some websites, such as Facebook, allow you to elect someone to turn your account into a memorial account. This person is known as your Facebook Legacy Contact. Other sites, such as Google, have an Inactive Account Manager that you can name to help close or take over your account.

Most websites have a standard TOSA where your account closes automatically. This last option may sound great, but there have been cases where finances need to be settled or money that should go to beneficiaries are locked in a closed account. In situations like these, personal representatives or trustees must go to court and get access to these accounts.

With help from an estate planning attorney, you can provide protection for your assets and give access to your trusted family members or personal representative. Here are some options that your attorney can assist you with concerning your digital assets:

  • Create a Durable Power of Attorney (General Power of Attorney). You name an agent, granting access to your agent for your accounts
  • Create a Will. You name an executor and provide language giving them access your accounts.
  • Create a Trust. You name a trustee and allow them access to your accounts.

It is important to note that, in situations where you become incapacitated, your will only goes into effect after you pass away. A will cannot step in and allow your executor to control your accounts for you. Only a durable power of attorney or trust gives authority to your agent or trustee to control your accounts during incapacity.

What You Can Do Today

Here is a list of things you can do to ensure that you have some protection in place:

  • Write down and keep track of your online accounts.
  • Close any accounts you no longer use.
  • Make sure accounts don’t have your payment information saved and/or preloaded.
  • If you need to, write down your account login information. Keep this information in a locked, safe location away from your computer or digital devices.
  • Go on Facebook and nominate someone to be your Legacy Contact.
  • Go to Google and nominate someone as your Inactive Account Manager.
  • Look through each account’s Terms of Services Agreement and educate yourself on what will happen to your accounts after you pass away.
  • Leave instructions for your loved ones.
  • Meet with an attorney to create a Durable Power of Attorney, Will, or Trust