Before the 2000s, most people never consider their email account or AOL login as critical information for your estate plan. But the world has drastically changed over the last two decades, mostly due to the internet.
In 2020, it’s critical to think about how your footprint on the internet affects your legacy. It includes managing your online social media platforms and digital accounts. But how does that work in an estate plan?
Defining a digital asset
Before incorporating digital assets in your estate plan, you need to know what classifies as digital assets. Mostly, digital assets are an asset or record that is stored electronically.
These assets include cryptocurrencies, domain names for websites, digital photos and videos, digital rights to literary, musical composition, films or theatrical works, digital accounts for banks or credit cards, blog content, online video channels that generate income and online gaming avatars that include real-life money.
All these assets may be incorporated into an estate plan as long as you consider the three main obstacles of digital privacy.
Digital property is a relatively new aspect of estate plans, so there are obstacles when it comes to naming beneficiaries to certain assets:
- Data encryption – Most digital assets are encrypted and secured through passwords. And the data encryption scrambles the information so thoroughly that it’s impossible to unscramble it without the right password. If you don’t transfer the passwords, it will be impossible for your family members to access the accounts.
- Data privacy laws – On the federal level, service providers cannot overturn online account information unless there is the owner’s consent. In simple terms, social media sites cannot turn over any access to profiles unless the owner allows it. And this causes significant problems for families who try to shut down profiles or access digital accounts without ownership.
- Criminal laws – There are laws the protect consumers from fraud and identity theft that actually create hurdles for families to access any digital accounts of a deceased relative. To counteract these laws, you have to incorporate this information, so your beneficiaries do not have to seek legal loopholes to access your accounts.
The right estate plan takes account of all your assets and manages what is important for your family to have for your legacy. Do not wait to start incorporating these assets into your estate plan.