In today’s world, our lives are highly intertwined digitally and increasingly lived online. Digital assets have become a significant part of many estates. This includes the likes of social media profiles, photos, cryptocurrency, and much more. Digital assets make up a huge part of our financial and personal lives. Many individuals overlook digital assets when creating their estate plan. As an estate attorney practicing in New York State, understanding how to manage these assets in estate planning has become increasingly valuable.
Digital assets can exist as a professional, financial, or personal platform. Examples of each are as follows:
Professional assets include digital intellectual property, domain names, business emails, and saved data.
Financial assets include online banking, Venmo, PayPal, Bitcoin and investment platforms.
Personal assets include saved photos, personal emails, personal blogs and social media profiles.
Digital assets should be preplanned and discussed with your friends, family or your executor named in your Last Will and Testament. These selected individuals should have access to your usernames, passwords, and two-factor authentication. Without the proper planning, they may face roadblocks in managing and accessing your accounts after you pass. Most digital property, such as online bank accounts, investment accounts, and personal and professional emails, should include clear instructions and legal authority to access because these assets can contain sensitive financial and/or legal information it can also hold monetary or sentimental value.
Why do digital assets matter in estate planning? When a person passes away, their executor is responsible for probating their estate. This means collecting assets, paying debts and distributing property. Being able to access someone’s digital assets has become increasingly important. If digital assets are locked behind password or blocked by restrictive terms of service, this could lead to frustration, a loss in value or potential legal disputes.
How to plan for digital assets in your estate plan in New York State:
- Create an Inventory List for your Digital Assets: Make a detailed list for your named executor outlining your digital accounts, assets, online accounts, investment accounts inclusive of usernames, passwords and explicit directions for accessing these online accounts and platforms.
- Update your legal documents: Make sure your Last Will and Testament and Power of Attorney include clear and explicit authorization for your named executor to be able to access and manage your digital assets.
- Store Access Credentials Safely: Make sure to use a password manager or leave clear instructions in a letter or any stored form which is kept in a secure location for your named executor to have access after you pass.
Planning for digital assets in your estate plan is no longer optional; it is essential. Protecting your digital assets is a critical step as our lives become increasingly intertwined with technology.
Contact an attorney in New York State with any questions or concerns when it comes to your estate plan.
This is not intended to be legal advice. Speak with an attorney regarding your specific situation.
Rachel J. Rosenwasser, Esq., is an associate attorney practicing estate planning and real estate. She can be reached at 845-764-9656 and by email.