Incorporating Digital Assets in Your Will: What You Need to Know

In today’s digital age, we all have a growing collection of digital assets—ranging from social media accounts and email addresses to cryptocurrencies and digital photos. These assets have real value and significance, both emotionally and financially, yet they are often overlooked in traditional estate planning. As more people store personal and financial information online, it’s essential to consider how digital assets are handled in the event of death or incapacity. In this blog post, we’ll explore what digital assets are, how they work, and why it’s important to incorporate them into your will or estate plan.

What Are Digital Assets?

Digital assets are intangible items that exist in digital form. They can be broadly classified into several categories:

1. Online Accounts and Digital Content
   • Social Media Accounts: Facebook, Instagram, Twitter, LinkedIn, etc.
   • Email Accounts: Gmail, Yahoo, Outlook, etc.
   • Cloud Storage: Google Drive, Dropbox, iCloud, and other cloud services where personal files, documents, photos, and videos are stored.
   • Digital Files: Music, eBooks, photos, documents, and video files.
   • Websites and Blogs: If you own a website or a blog, it’s a digital asset.
2. Financial Assets
   • Cryptocurrencies: Bitcoin, Ethereum, and other digital currencies.
   • Online Bank Accounts: Certain online-only banks or payment platforms like PayPal, Venmo, or even digital wallets like Apple Pay.
3. Intellectual Property
   • Domain Names: Registered internet domains you own.
   • Software Licenses: Programs or tools you’ve purchased or subscribed to.
4. Online Gaming Accounts
   • Gaming Accounts: For games like Fortnite, World of Warcraft, or Steam, which store virtual property, currencies, or assets.

These assets can hold significant value—whether in terms of sentimental worth, financial value, or both. As such, it’s critical that individuals incorporate them into their estate plans to ensure they are properly managed and passed on to the appropriate beneficiaries.

Why Are Digital Assets Important in Your Estate Plan?

1. Sentimental Value: Many people store family photos, videos, and memories in digital form. These assets are often irreplaceable and should be passed to loved ones who will treasure them.
2. Financial Value: Digital financial assets like cryptocurrencies or online bank accounts can hold real value. If you don’t make arrangements for these assets, your beneficiaries may struggle to access or claim them.
3. Legal Considerations: Many online service providers (social media platforms, email services, etc.) have specific terms of service regarding account access upon death. Without clear instructions, your loved ones may find it difficult to access these accounts. Additionally, failing to address digital assets could result in unnecessary complications during the probate process.
4. Privacy and Security: Some digital assets require protection for privacy reasons, particularly accounts that store sensitive data (like email or online banking). If you don’t plan for access to these accounts, unauthorized people may try to access them, leading to privacy violations, identity theft, or other issues.

How to Incorporate Digital Assets in Your Will

Given the rise of digital assets, estate planning must evolve to reflect this reality. Here’s how you can ensure that your digital assets are properly incorporated into your will:

1. Create a List of Digital Assets

The first step is to create a comprehensive inventory of your digital assets. This includes both personal and financial assets, such as:

• Social media and email accounts
• Online banking and investment accounts
• Digital photos, videos, and files
• Cryptocurrencies or digital wallets
• Subscription services and cloud storage

You should record the usernames, passwords, account numbers, and any other relevant information (like security questions or PIN codes) for each digital asset. Be sure to keep this information in a secure, private location, such as a password manager or a safe, rather than writing it on a piece of paper that could be easily lost or stolen.

2. Nominate a Digital Executor or Trustee

A digital executor (also known as a digital estate planner) is a person you designate to manage your digital assets after your death. This person should be someone you trust with access to your online accounts, as they will be responsible for handling your digital assets in accordance with your wishes.

• Duties: Your digital executor may be responsible for things like closing email accounts, downloading family photos, transferring ownership of domain names, managing your digital currency, and more. They may also have to work with online platforms to ensure your accounts are properly deactivated or transferred.
• Legal Permissions: It’s important to note that many online platforms (such as Facebook or Gmail) may have specific terms and conditions regarding how accounts are handled after death. You’ll want to ensure your digital executor has the legal authority to act on your behalf and that you’ve given them explicit instructions on how to manage or distribute your accounts.

3. Provide Instructions in Your Will or Trust

While a will is a common method for addressing the distribution of physical assets, digital assets need specific language to ensure they are handled properly. You may want to:

• Describe how you want your digital assets managed: For example, you can direct your executor to transfer all your digital photos to a family member or close friend, or you can specify who should inherit your cryptocurrency holdings.
• Give clear access instructions: Provide instructions on how your digital executor can access your accounts. You can specify how to find the necessary passwords or keys to access your accounts (for example, by providing them in a sealed envelope or using a secure online vault).
• Avoid Ambiguity: Be clear about how your digital assets should be handled. Vague instructions can lead to confusion or legal disputes.

4. Use a Digital Asset Authorization Tool

Some digital asset providers, such as Google, Facebook, and Microsoft, offer “digital legacy” or “in-memory” programs. These tools allow you to set up a plan for how your accounts should be handled upon your death or incapacity. For example:

• Google: Google’s Inactive Account Manager allows you to specify a trusted contact who can access your account if it becomes inactive for a set period of time.
• Facebook: Facebook allows users to choose a “legacy contact” who can manage their account after death, either memorializing it or deleting it altogether.

These tools help give your executor the legal ability to access your accounts, even if they don’t have your login credentials. Be sure to check the options available for each digital asset you own and make use of them when possible.

5. Keep Your Plan Updated

As digital assets evolve, so should your estate plan. Regularly update your inventory of digital assets and the instructions in your will, especially as you acquire new digital properties (such as new online accounts, cryptocurrencies, or a domain name). Similarly, if you change email accounts or start using a new online payment service, be sure to update your will accordingly.

Challenges of Managing Digital Assets in a Will

While incorporating digital assets into your estate plan is important, it can be complicated. Some common challenges include:

• Account Access Restrictions: Some platforms may not allow you to transfer ownership of accounts or digital assets. This can complicate the process for your digital executor if access is restricted or the platform has stringent policies regarding deceased users.
• Privacy Issues: Providing login credentials for email or social media accounts can raise privacy concerns. Be mindful of how much access you’re granting to your digital executor and the level of detail in your instructions.
• Cryptocurrency Concerns: Digital currencies such as Bitcoin are often stored in digital wallets that are protected by private keys. Losing these keys can result in the permanent loss of access to the funds. It’s essential to securely store these keys and make sure your digital executor knows how to access them.

Conclusion: The Importance of Planning for Your Digital Legacy

As we continue to live more of our lives online, the importance of including digital assets in your will and estate plan cannot be overstated. Digital assets hold both financial and sentimental value, and having a clear plan for their distribution ensures they will be handled according to your wishes.

By taking the time to inventory your digital assets, appoint a digital executor, and provide clear instructions, you can avoid complications in the future. Remember, just as you wouldn’t leave your physical assets to chance, don’t leave your digital assets to uncertainty—plan for your digital legacy today.