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Estate planning should involve digital assets

| Jun 9, 2020 | Estate Planning

Planning your estate traditionally involved documents and physical property such as homes and jewelry. But estates are now more than a paper will or trust kept in a lockbox because much of our lives have become digitized and gone on social media. Digital assets should be an important part of our estate planning because these can be lost or misappropriated.

Digital assets

A digital asset is any online record that a person owns. These include a wide array of content such as a blog or online rewards program. Personal mementoes such as photographs and videos are stored in cloud-based systems. Most professionals receive multiple income streams from bank or brokerage accounts or stock portfolios which are also considered a digital asset.

Banks now allow their customers to conduct their financial transactions online while online money transfers may take place over digital payment systems. Estate planning must involve these digitized transactions.

Online rewards programs are another new asset. These usually reward returning customers with points, cash backs or discounts which increase in value over time.

Digital assets also include digitized photographs, videos and music files. Although these may not have financial worth, these assets have sentimental value and may be irreplaceable.

On average, each person also uses at least five social media accounts. Although these also have little financial value, these must be effectively managed because of their sentimental value.

Proper planning

These assets lose value if they are not properly administered or if there are no plans for ready access after their owner dies. For example, family members may be unable to gain access to a bank account, even if they have its password, if the will or other document does not grant them access.

Proper planning includes compiling a list of the different accounts that you own and usernames, passwords, secret questions and other access information to these accounts. Set forth how these assets should be managed and distributed.

Your planning should also include appointment of a digital executor. That person will have legal access to your online digital accounts and supervise their control and allocation.

An attorney can assist you with formulating a plan that assure that your estate assets are responsibly managed and allocated. They can also help prepare legal documents that meet these needs.