Managing Your Digital Assets: A Key Part of Estate Planning

When it comes to estate planning, most people focus on the big-ticket items like homes, retirement accounts, and family heirlooms. But in today’s digital age, an often-overlooked aspect of your estate is your digital footprint.

What Are Digital Assets?

Digital assets are more than just email accounts and social media profiles. They encompass everything from your financial accounts and online subscriptions to your digital photos, cryptocurrency, and even your personal websites or blogs.

Here’s a breakdown of common digital assets:

• Social Media: Facebook, Instagram, X (Twitter), LinkedIn, and TikTok accounts.

• Financial Accounts: Online banking, investment platforms, cryptocurrency wallets, and Venmo/PayPal accounts.

• Subscriptions and Services: Streaming services (like Netflix and Spotify), cloud storage (such as Google Drive or Dropbox), and online shopping accounts (Amazon).

• Digital Content: Digital photos, music, videos, and e-books.

• Professional Accounts: Websites, blogs, or YouTube channels that may generate income or hold significant intellectual property.

Why You Should Include Digital Assets in Your Estate Plan

Without the proper estate planning, access to digital assets can become a legal and practical headache for your family after you pass away. Many tech companies, to comply with Federal privacy laws, have strict privacy policies, which could prevent your loved ones from accessing your accounts absent a court order. For example, your family may not be able to retrieve valuable data stored in a cloud account, or close out financial accounts that aren’t linked to physical documentation.

In the Bay Area, where tech plays an essential role in both professional and personal lives, this can be especially important for young adults working in industries that rely on digital platforms.

Steps to Manage Your Digital Assets

Here are some essential steps to incorporate digital assets into your estate plan:

1. Create a Digital Inventory: Start by making a list of all your digital accounts, from social media profiles to financial and business accounts. Be sure to include login credentials, passwords, and security question answers. This list should be stored in a secure location that your trusted decision maker can access, like a password manager or secure physical document.

2. Set Your Preferences: For social media accounts, check if the platforms offer legacy options. For example, both Facebook and Apple allow you to assign a legacy contact to manage your account after your death. Be clear about whether you’d like accounts memorialized or deleted.

3. Include Digital Assets in Your Will and Trust: Make sure your estate plan outlines specific instructions for digital assets. You can specify how your digital financial assets should be distributed and who should have access to your personal accounts.

   In California, you can appoint someone to handle your digital assets as part of your estate plan. This person will ensure your wishes are followed regarding the management or deletion of your accounts. They should be tech-savvy and familiar with handling digital platforms.

   Even without appointing someone specifically for this, be sure your estate planning documents contain appropriate provisions for any of your trustees to have the adequate legal authority to handle digital assets. For example, if your trust was established in the 1990s, it’s possible those provisions were not a consideration.

4. Keep Your Plan Updated: As technology evolves, so does your digital footprint. Update your digital inventory and estate plan regularly to reflect any new accounts or assets.

In a tech-centric region like the San Francisco Bay Area, neglecting your digital assets in your estate plan could leave your family with unnecessary complications. By taking the time to organize and plan for the distribution and management of your digital assets, you’re ensuring that your legacy, both physical and digital, is protected.

If you’re ready to secure your digital estate, contact our firm to discuss how we can help integrate your digital assets into your comprehensive estate plan.

Managing Digital Assets in Your California Estate Plan

In today's digital world, properly managing digital assets is essential for comprehensive estate planning. These assets include everything from online financial accounts and social media profiles to digital photos, e-books, and cryptocurrencies. California has addressed the need for digital asset management in estate planning with the adoption of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2016, providing guidelines for access and control of digital information after death or incapacitation.

Key Points for Digital Asset Management in California:

• Inventory Digital Assets: Compile a detailed list of your digital assets, including access credentials. Keep this list updated and securely stored.

• Legal Permissions: Use tools provided by digital platforms to direct the handling of your digital accounts after your death. Supplement this with clear instructions in your will or trust regarding all digital assets.

• Appoint a Digital Executor: Assign a technologically savvy individual as your digital executor to manage the execution of your digital estate according to your established plans.

• Ensure Legal Access: Your estate documents should explicitly authorize your executor to access and manage your digital assets. This step is crucial to prevent service providers from denying access due to privacy policies.

Practical Recommendations:

1. Utilize Online Planning Tools: Platforms like Google and Facebook offer settings to control what happens to your accounts posthumously.

2. Specify Asset Handling: Clearly define the fate of each digital asset in your estate planning documents to eliminate any uncertainty.

3. Protect Sensitive Information: Consider using encryption to secure the document containing your digital asset inventory.

Including digital assets in your estate planning is vital to ensure they are managed correctly in the event of your incapacity or death. California's RUFADAA provides a legal framework to help residents ensure their digital legacy is handled according to their wishes. For thorough and secure planning, consider consulting an estate planning attorney knowledgeable about California's digital asset laws.

Planning for Your Digital Legacy

An estate plan often focuses on tangible property such as jewelry, artwork, money, and vehicles. However, in this age of technology, it is important to remember to include your digital assets. Digital assets consist of everything we own online. Because we spend more time on computers and smartphones than we ever did before, 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. First, without a plan, digital assets may get lost in the Internet ether and not pass to your loved ones after your death due to the simple fact that their existence is unknown. Second, 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. Third, like most adults, you want certain aspects of your digital life to remain private. If you do not create a plan, your loved ones may learn things that you wish to keep secret. Finally, planning 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 are now 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 are 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 the following:

● Social media accounts (e.g., Facebook, Instagram, Tik Tok, 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

Take inventory of your digital assets. If something were to happen to you, a trusted person should have complete access to your online footprint. This includes usernames and passwords for all 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 trusted person can easily access them when the time comes. 

Because they are not controlled by governments or banks, cryptocurrency and NFTs must be handled carefully. You do not 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 the following:

● 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 should not be memorialized in your will, especially regarding cryptocurrency, as they could be made public when the will is submitted to the clerk of 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 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, you can feel relieved that your digital assets will be easily located, managed, and passed to your loved ones.