Including Digital Assets In Your Estate Plan – Pt 1

Estate Planning for Digital Assets

Digital technology has made our lives easier, but it has also created new challenges for estate planning. Without proper planning, your digital assets may be lost forever when you die. Locating and accessing these assets can be nearly impossible for loved ones, and in some cases, accessing them without authority may even violate privacy laws or terms of service agreements. You may also have digital assets you don’t want others to inherit, which makes planning ahead essential.

Types of Digital Assets

Digital assets generally fall into two categories: financial and sentimental. Financial digital assets include cryptocurrency, PayPal or Venmo accounts, loyalty program rewards, domain names, websites, and intellectual property that generates royalties. Sentimental assets include photos, videos, emails, social media accounts, and personal blogs—items that may hold more meaning for your loved ones than money ever could. Planning for both ensures your family has access to what matters most.

Ownership vs. Licensing

You may not actually own many digital assets. Some, like cryptocurrency and PayPal accounts, are transferable. But others—such as Kindle e-books or iTunes files—are only licensed for your personal use and may not be transferrable at all. Whether or not they can be passed on depends on the Terms of Service Agreements (TOSA). Even if your loved ones have your login credentials, using them may violate these agreements or privacy laws.

The Law of the Digital Land

To address these issues, most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This law allows you to give a fiduciary access to your digital assets through online tools provided by companies, such as Google’s Inactive Account Manager or Facebook’s Legacy Contact, or through instructions in your estate plan. If no instructions exist, the provider’s terms of service will control. Ultimately, leaving clear directions—including usernames and passwords—is critical to ensuring your wishes are carried out.

Make a Plan

Digital assets are part of your legacy, and without planning, they may be lost or inaccessible. By including them in your estate plan and leaving clear instructions, you can protect both financial value and sentimental treasures for the people you love.

Read Part 2 Five Steps to Include Your Digital Assets in Your Estate Plan HERE