Your estate includes far more than your home, financial accounts, and personal belongings.
For many people, a significant portion of their lives now exists online, yet digital assets are frequently overlooked during the estate planning process.
Email accounts, cloud storage, social media profiles, online banking, subscription services, digital photos, cryptocurrencies, and password managers can all create challenges if no one has the legal authority or practical ability to access them.
Taking the time to identify these assets and incorporate them into your estate plan can make life significantly easier for the people you trust to act on your behalf.
Identify Your Digital Assets
The first step is understanding what qualifies as a digital asset.
In addition to financial accounts, consider everything you access online, including email, online storage, social media, reward programs, websites, digital business records, and cryptocurrency wallets.
Creating a secure inventory of these assets provides your fiduciaries with a clearer picture of what exists and what may require attention if you become incapacitated or pass away.
Give Your Fiduciaries the Legal Authority to Act
Knowing an account exists is only part of the equation.
Your executor, trustee, or agent acting under a power of attorney also needs the legal authority to access and manage those digital assets.
Federal and state privacy laws, along with the terms of service established by online providers, may prevent someone from accessing an account without proper authorization.
Estate planning documents can include provisions that grant your fiduciaries the authority needed to manage your digital affairs in accordance with applicable law.
Don’t Forget About Cryptocurrency
Cryptocurrency presents unique estate planning challenges because ownership is controlled by private keys and access credentials rather than a financial institution.
If those credentials are lost or cannot be located, the assets themselves may become permanently inaccessible.
Identifying cryptocurrency holdings and documenting how authorized individuals can locate the necessary access information is an important part of protecting those assets.
Store Information Securely
Your estate planning documents should not contain usernames, passwords, or private keys, since those details frequently change and can create security concerns.
Instead, maintain a secure record of your accounts and how authorized individuals can locate access information when needed.
Review and update that information regularly as accounts change or new digital assets are acquired.
A Complete Estate Plan Includes Your Digital Life
Digital assets have become an increasingly important part of modern estate planning.
Without proper planning, valuable information, financial assets, family photographs, and online accounts may be difficult or even impossible for your loved ones to access.
An estate plan should reflect the way you actually live today. As more of your financial and personal life moves online, planning for digital assets has become an essential part of protecting both your legacy and the people responsible for carrying it out.
About McCormack Law, LLC
McCormack Law, LLC is a boutique estate planning law firm focused on delivering highly personalized, compassionate, and comprehensive estate planning services for individuals, families, and small business owners.
For more information or to schedule a consultation, please contact us today.
Leave a Reply