The internet revolutionized how we store our valuables; instead of photo albums or safety deposit boxes, we save our family photos on Facebook, and our bank information is encrypted online.
It makes sense that the digitalization of everyday life affects how adults plan their estate and transfer digital assets to their family members. It’s crucial to understand the unique challenges that come with digital assets and how to address them quickly.
Challenges of planning in an online environment
The first challenge is planning an estate with digital assets is classifying what a “digital asset” is. Digital assets include your personal information stored in online formats. For example, your email account, personal websites and social media profiles are digital assets.
Many people think their cell phones or laptops as digital assets. However, laptops and phones are physical devices we use to access digital assets, such as blog posts. It’s critical to know that digital assets offer specific challenges that standard estates may not address, including:
- Access – most digital assets require a username and password for access. Without access to the assets, there is no way for the court to transfer the digital property to your beneficiaries.
- Ownership – it is difficult to define “ownership” in some digital assets because it’s not like most physical property that involves documentation or paperwork to prove ownership. There is more flexibility in how digital property is shared.
- Availability – there are challenges for most relatives to find specific digital assets due to the vast availability of information on the internet if they aren’t sure exactly where the asset’s location, they may never find the property.
To combat these challenges, you need detailed documentation of your digital assets and login information. It will ease the burden on your heirs to search through your computer to access critical profiles online.
You will also need to consider where you store your documentation. A will seems like a perfect choice. However, passwords need constant updates, and it’s not feasible to update your will that often.
You should discuss digital assets with an advisor to determine the best location for your digital asset information and what your loved ones should do with your digital property after your passing.