You may often hear the term “digital assets” bandied about, but what does it mean? Here are answers to some frequently asked questions about digital assets and how to manage them.
What is a Digital Legacy?
A legacy is anything you leave behind when you die. Technically, the definition is “something transmitted by or received from an ancestor or predecessor.” People generally want to leave a legacy because they want to feel that their life mattered. This typically means making a contribution to future generations, whether that be money, valuables, or memories. Not all that long ago this was pretty straightforward, but in the age of technology, your digital assets can be buried in an intricate rabbit hole of digital footprints and, without a roadmap, they may never be found.
What Digital Assets Are We Talking About?
Digital assets can be divided into several categories. These include:
Personal Assets Photographs, videos, music, and other creative montages.
Social Media Assets Facebook, Instagram, Twitter, YouTube, Pinterest, and other social media accounts, both personal and business. These can have a hard monetary value based on followers.
Financial Assets Venmo or Paypal as well as bitcoin and cryptocurrency fall into the category of digital financial assets. Access to online bank accounts does not constitute a digital asset nor is the underlying asset held in an online bank account a digital asset.
Business Assets Deeds, possessions, intellectual property, the company itself and/or its stock.
Domain Names / Blogs Personal web domains. These can also command a hard monetary value.
Loyalty Programs Earned miles or points that may be transferrable upon death.
What Do I Need to Do to Include My Digital Assets in My Estate Planning?
Get organized
Consider whether you want someone to access the content of your email during your lifetime, in the event of incapacity, or after your death.
Consider whether you want your social media accounts preserved.
Consider what you want to happen to your photographs, the data on your apps, and assets such as eBooks, music, and videos.
If social media accounts have monetary value, consider transferring them to a business or a trust, appointing a digital executor, or giving the general executor specific authority to deal with the social media accounts.
If the social media provider has an online option for how your assets are managed upon death, make sure you complete their form.
Review your digital legacy plan every year.
How Can an Attorney Support Me in My Digital Asset Planning?
Attorneys cannot access your digital assets without violating communication laws, nor can they organize your digital assets for you. Clients generally do not want to pay attorneys for something they can take care of themselves. Generally, you want to organize your estate as much as possible, including documenting and planning for how your digital assets will be handled. Once you have compiled this information, an attorney can help you integrate it into your overall estate plan.
What’s the Best Advice You Can Give to People About Their Digital Legacy?
Make a list of all accounts and passwords and keep it in a secure place. Update it regularly.
Write a letter to your family or executor that includes access credentials and instructions. Tell the person what you want to happen with each account. If you don’t want anyone accessing certain digital assets, say so. Keep the letter in a safe place with your other important documents. Important: Do not include this information in your will, as your will is a public document.
Back up your important digital data to a separate, secure hard drive or other secure device. Replicate your backup—hard drives and memory sticks can fail. Set a tickler in your calendar to run a backup quarterly.
Explicitly authorize the companies that hold electronic data to release that data to your fiduciaries in the event of incapacity or death—or not. Settings in Google and Facebook allow those companies to disclose certain digital assets and/or content of electronic communications to the fiduciaries upon your request.
What’s One of the Biggest Things You’d Like to See Improved Upon in Digital Asset Planning?
There is a bill pending in the New York State Assembly that would allow executors to access social media accounts. The bill remains in committee and has not been presented for vote. This would take a lot of the legwork out of the process for clients.
New York adopted a version of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which gives guidance on how to leave digital assets behind and what empowers a fiduciary, such as an executor or trustee, to access a person’s digital estate. New York could take this further to be uniform with other states’ laws. Otherwise, this can leave New York State fiduciaries at the direction of the terms of use. More than 20 states have adopted the uniform act in its entirety.
More Resources:
Watch my video, “How Do I Account for Digital Assets in My Will?”
Read my New York Family Magazine article, “There are Ways to Pass On Your Passwords”
Read my New York Family Magazine article, “What Cryonics and Bitcoin Mean for Your Future”
Read my blog article, “5 Important Steps in Planning for Your Digital Afterlife”
