In today’s increasingly digital world, a crucial question arises for many: ‘What happens to my digital assets after I die?’ From cherished family photos stored in the cloud to online financial accounts, social media profiles, and even cryptocurrency, our digital footprint is extensive. These ‘digital assets’ encompass any electronic data you have the right to access and can hold both significant financial and sentimental value. Just like your physical property, effectively planning for these assets in your estate is essential to ensure they are handled according to your wishes and protected from potential risks.

A digital asset now includes email accounts, social media, online banking, online subscriptions, e-commerce, photo stream, cell phone apps, gaming accounts and everything having to do with cryptocurrency. Don’t leave out airline miles or other loyalty program points.

Why Digital Asset Planning Matters

Ignoring your digital assets in your estate plan can lead to significant headaches for your loved ones. Beyond sentimental items like photos and videos, many digital assets hold tangible financial value—think cryptocurrency, online investment accounts, e-commerce platforms, or even loyalty program points and airline miles. Without clear instructions, these assets could become inaccessible, lost, or even vulnerable to identity theft and fraud after your passing. Ensuring your digital legacy is protected is just as critical, and in some cases even more complex, than managing your physical estate.

Can you protect and organize digital assets?

Yes, absolutely. Start with a list of all digital accounts including URLs, usernames and passwords. You should also note whether access requires third-party authentication—a verification code from a phone number or an email address to log in.

Create some kind of list, whether on a spreadsheet (encrypted for security), using an online password manager or a digital asset app. Paper also works, as long as it’s kept in a secure location.

How do digital assets get incorporated into my estate plan?

In most states, your executor can be given the right to access online accounts through your will, or you can include digital asset access in a Power of Attorney. However, it’s not that simple. Certain digital platforms only allow the original user access, even with passwords and authentication codes. Each has a Terms of Service Agreement to protect your privacy and the platform.

Some platforms offer the ability to name a legacy contact who can gain access to your account and either delete it or memorialize it after you die. However, not all do. You’ll need to go through all of your digital accounts to determine which ones permit a legacy contact and the limitations given to the legacy contact.

To support any litigation arising from a platform refusing to allow access, leave specific instructions in for your executor or agent instructing them as to what you want done with your digital assets. This directive may give your executor or agent the support they need to go up against big data. Your estate planning attorney will know the laws in your state and help create a plan.

Reference: Westchester & Fairfield County Business Journals (July 18, 2022) “Estate Planning for Digital Assets”