Planning for Your Digital Legacy

An estate plan often focuses on tangible property such as jewelry, artwork, money, and vehicles. In this age of technology, it’s important to include your digital assets. “Digital assets” refers to everything you own online. Because we spend more time on computers and smartphones than, you may not realize how much digital stuff you own, from photos and videos to online accounts, cryptocurrency, and nonfungible tokens (NFTs).

Why Is It Important to Plan for Digital Assets?

Planning for digital assets is important for several reasons. Without a plan digital assets may get lost in the Internet and fail to pass your loved ones after your death. Planning now means your family will not have to worry about hunting for these items upon your death while also grieving a beloved family member. If, like most adults (roughly 70 percent of them), you want certain aspects of your digital life to remain private, and you don’t create a plan, your loved ones may learn things that you wish to keep secret. Making a plan now can minimize the risk of identity theft, which happens to 2.4 million deceased Americans each year. 

What Are Digital Assets?

Instead of existing in photo albums and on videotapes and DVDs, most of our family photos and videos digital. Even if they lack commercial value, they certainly have sentimental value that you want to preserve for your family and friends. Social media accounts containing your photos and videos can also have value to your loved ones when you’re gone. For example, a Facebook account can serve as a memorial after you pass away. When you consider all of the other accounts that you log into (more than 130 on average), the list becomes quite lengthy. 

Digital assets that you may own include:

• Social media accounts (e.g., Facebook, Twitter, LinkedIn)
• Financial accounts at brick-and-mortar and online institutions
• Business documents and other files stored in the cloud
• Cryptocurrency
• NFTs
• Databases
• Device backups
• Internet domain names and uniform resource locators (URLs)
• Streaming service accounts (e.g., Netflix, Peacock, Hulu)
• Merchant accounts (e.g., Amazon, Etsy, eBay)
• Gaming tokens
• Virtual avatars
• Points-based loyalty programs (e.g., for groceries, gas stations, airlines, and hotels)
• Rights to intellectual property, artwork, and literature
• Online betting accounts
• Monetized video content

Including Digital Assets in Your Estate Plan

Taking inventory of your digital assets may take some time, but it’s worthwhile. If something were to happen to you, your estate planning attorney in Ann Arbor or another trusted person should have complete access to your online footprint. This includes usernames and passwords for all your accounts. Tools such as Dashlane or the password manager integrated in your browser can be used to simplify the storage of usernames and passwords. 

In addition, you should continuously back up all digital assets, including photos and important documents, to the cloud, and ensure that your attorney or a trusted person can easily access them when the time comes. 

Because they’re not controlled by governments or banks, cybercurrency and NFTs must be handled carefully. You don’t have the option of calling customer service to reset your password if you forget or lose it. NFT and cryptocurrency passwords should be stored online in a “hot wallet,” or in an offline device known as a “cold wallet.” Either way, someone needs to know how to access your passwords when you cannot. 

Other estate planning considerations for digital assets include:

• Your estate plan can provide that your digital possessions be handled by one or more cyber successors who can distribute your digital assets like tangible property. 
• One cyber successor can control your Instagram account, for example, while another can take possession of your Bitcoin. 
• Keep in mind that passwords shouldn’t be memorialized in your will, especially regarding cryptocurrency, as they could be made public if your will is submitted to probate court. 
• Consider how technologically savvy a person is before appointing that person as your cyber successor.

Next Steps for Your Digital Assets

Talk to your estate planning attorney in Ann Arbor about your digital assets and cyber successors. Have a conversation with potential cyber successors about how they would handle your assets, and make sure that they would carry out your wishes before appointing them. Digital assets can be placed into a trust or distributed through your will, or you could grant access to them through a power of attorney. With the help of an experienced estate planning attorney at Pear Sperling Eggan & Daniels, P.C, you can feel relieved that your digital assets will be easily located, managed, and passed to your loved ones.