With the passage of time, you accumulate assets and foster a life for yourself and your family. However, when it is time to create an estate plan so that your family is protected and taken care of, there are assets that many do not consider: digital assets.
The digital assets that you accumulate can range from financial assets that exist on mobile payment services like Cash App, PayPal, or Venmo, to social assets like a Facebook profile. These are assets that could impact the worth of your estate, as well as the emotional well-being of your loved ones after you die.
Town Hall
Moderator Scott Trout hosted “Preparing Your Digital Life for Death: TuckerAllen Town Hall,” a roundtable discussion featuring TuckerAllen attorneys, discussing issues related to estate planning and how you can create strategies to account for your digital life and digital assets.
“Digital estate planning is simply the process of organizing your digital property and making arrangements for what should happen to that property after your death,” TuckerAllen attorney Kevin Mason said. “It definitely gets more nuanced, depending on the different digital assets you have, whether that’s a social media account or some sort of bank account.”
Without the proper planning involved, your family may not be able to access these types of accounts, nor may they be aware of their existence.
Handling online businesses
For many, online businesses and blogs can be a source of revenue, and in your estate plan, you need to be able to account for that revenue stream and what you would like done with these entities.
“If there’s a blog, if there’s a website with advertising money coming in, or if there is an online business, those are extremely important things to get in order,” TuckerAllen attorney Missy Shands Manning said. “I cannot stress enough how difficult it is to go through probate with an income-producing asset like that.
In order to avoid some of the struggles that your family may have to deal with in probate regarding an income-producing online store or blog, it is necessary to set up a limited liability corporation (LLC).
“You want to make sure that your business is in an LLC and that people can access those accounts and know what is going in and out,” Ms. Shands Manning said. “That way, if something happens to you, they can finish out the orders, close out the website, or continue to run that business however you want it to work out.”
Managing cryptocurrency
Settling your digital affairs is more than just existing business. Cryptocurrency has created a more modern market of digital assets than ever before, and with the private and personal nature of the currency, your loved ones may not know how to access these large sums that can accumulate after you die.
“Cryptocurrency accounts are very unique, because they are not actual dollars,” Ms. Shands Manning said. “They’re tied to dollars, but fluctuate in value and are highly protected.
“They generate a key that is personal to you that is so private that not even the organization can access that key. So if you lose that key or don’t pass that on to your beneficiaries and your family, then they may attempt to get a court order to get the access to that money, but they can’t physically cannot do it without that key. You can have all the court orders in the world, but still not be able to access that millions of dollars in currency.”
Securely recording login information
Along with a cryptocurrency key, you also want to write down any passwords for any and all online platforms. Whether it is social media or banking-related, you not only should have a record of logins and passwords, but also any security questions and answers that your loved ones may need.
“It is always a good idea to have a secure list of your logins and passwords,” TuckerAllen attorney Teresa Yao said. “However, if you want to make it as easy as possible for your family and loved ones later on, do some proactive planning and find out more information about secondary user authorizations on individual platforms.”
Social media after death
Many platforms, like Facebook, have existing procedures in place after a user has passed. If you wish for your profile to still exist or if you wish for it to be deactivated, there are ways of making your wishes realized.
“For Facebook, you can set up legacy contacts, which allows you to name specific people that you want to serve as your legacy contacts,” said Ms. Yao. “After you pass away, the designated legacy contact can notify Facebook about your death, providing a Proof of Death.
“From there, the legacy contact can gain access to your Facebook account and post a memorialization post with pictures, featured at the top of your profile. They can either continue to make posts without being able to delete any posts, memorializing you; or they can deactivate the account for you.”
Nuanced strategy of digital assets
Similar to the rest of your estate, your digital assets also require a nuanced strategy that dictates how you want them handled. Before you die, you need to have an understanding of your impact on these assets, as well as the impact your death will have on them.
By creating a comprehensive inventory that securely records logins, passwords, and keeps track of any financial or business-related entities that digitally exist, you can designate your wishes and have peace of mind for yourself and your loved ones moving forward.
Click for a digital asset inventory worksheet from TuckerAllen.