So much of our lives take place online today. We run businesses, social media accounts, and more. We store our photos, important files and more on our computers. Even though all of this is true, most people are not doing enough to protect their digital assets — that’s where your digital estate plan comes in.
So what is digital estate planning, and why should you care about it?
What is a digital estate plan?
When you think of an estate plan, you might think of protecting your personal assets such as your cash, investments, and real estate through legal instruments such as wills and trusts. A digital estate plan is a lot like that — but for your assets located online or digital assets.
A digital asset is a broad term that will continue to evolve as technology expands. Essentially, anything you own online that has a monetary value is considered a digital asset.
A digital estate plan allows you to outline your wishes regarding your digital assets in case you pass away. Digital assets include everything from files saved on your computer or the cloud to online banking, social media, and gaming accounts.
Why do you need a digital estate plan?
Digital assets are typically not part of the traditional estate planning process. That means if you pass away, your family may not be able to legally gain access to your online assets or other important personal information.
By creating a digital estate plan, you have an opportunity to outline your wishes regarding your digital assets. For example, you may have an income-generating account on a marketplace such as Etsy, Amazon, or eBay. Would you want a loved one to inherit the account if you pass away?
You want to create a digital estate plan to provide instructions regarding your online assets. Sticking with the example above, you may not want anyone to take over your Etsy or Amazon account — you may prefer to have someone close it down on your behalf instead. These are all things you can detail in your digital estate plan.
How to create a digital estate plan
Now that you know what a digital estate plan is and why it’s important, it’s time to make your own.
We created the following digital estate planning checklist to help. Here are the steps to take:
Make a list of your digital assets
Digital assets can be separated into two main categories: personal and business digital assets.
Personal digital assets may include the following:
- Websites and domain names
- Online bank accounts
- Websites or blogs
- Digital art
- Cryptocurrency trading accounts
- Nunfungible tokens (NFTs)
- Email accounts
- Gaming accounts
- Social media accounts (Instagram, TikTok, Facebook, Twitter, etc.)
- Payment accounts such as PayPal, Venmo, etc.
- Credit card rewards balances
- Frequent flyer miles
- Any other personal information you store on your computer, mobile phone, or other devices
Business digital assets include any digital property owned by a business, such as:
- Websites or domains owned by your business
- Online accounts registered to your business
- Ecommerce or marketplace accounts (Etsy, Amazon, eBay, etc.) and any assets of the online store such as inventory
- Client information
- Email lists, newsletter subscribers
- Intellectual property (patents, trademarks, etc.)
- Digital products
- Any other business information located on your computer, phone, or other devices
Once you’ve taken an inventory of your digital assets, be sure to create a spreadsheet or write down all of the usernames and passwords associated with each account. Many use digital vaults such as Everplans to store this information. You can choose whether to give your family access to your data immediately or after you pass away.
Name a digital estate plan executor
You know how the executor of your will helps manage the distribution of your estate after you pass away? You need to name someone to do that for your digital assets too. Contrary to popular belief, the executor of your traditional estate plan does not have the same rights when it comes to your digital assets. You have to specifically grant them (or a separate individual) authority to act as executor of your digital estate plan.
You want to make sure to leave your digital executor login info to your accounts. If your accounts have two-factor authentication, don’t forget to leave your executor the passcode to your phone so they can access the codes.
Decide who will get your digital assets
Once you’ve identified your digital assets, it’s time to think about who you want to leave them to if you pass away. Again, this can be everything from your monetized social media accounts, e-commerce accounts, or photos stored on your devices.
You can name the beneficiaries of your digital assets as an amendment to your will along with a letter of instruction to ensure there are no questions about your intentions and decrease the likelihood of someone contesting your will.
Legalize your digital estate plan
Now that you’ve identified your beneficiaries, it’s time to formalize your wishes. Since digital estate plans are not commonplace (yet), most people add their wishes for digital assets into their existing will through an amendment or codicil. Once you’ve legalized your digital estate plan, it’s good practice to review it once a year or so to ensure all of the information is up-to-date and that no changes are needed.
Secure your digital estate plan
Digital estate planning provides an opportunity to safeguard your online assets from hackers or potential identity theft or fraud. It’s crucial to tighten up your digital security features by using secure document storage vaults and a password manager such as LastPass or DashLane.
Creating a digital estate plan is essential in securing your legacy and ensuring your digital assets get into the right hands. As technology continues to expand, digital estate plans will become just as common as traditional estate planning. Why not be proactive and start protecting your digital assets today?