Digital Asset Planning
Today nearly everyone in America and throughout the developed and developing world has a kind of very valuable asset that was almost completely unknown only twenty years age – their digital assets. Although digital assets are very valuable, very few have any kind of plan to do anything to prevent theirs becoming irretrievable and therefore lost when they become incapacitated or die.
Your digital assets can include the sorts of things that used to exist as documents – such as your bank and other financial account statements. It also includes your user names, passwords and security questions that are necessary to get access to digital assets, such as your Facebook, Twitter, LinkedIn and other social media accounts. Your digital assets also includes licenses you hold to use third party software, software you have developed, your e-mail accounts, your stuff stored on picture and video storage sites, and your backup storage. Finally, it includes the information you have stored, often in ways protected by your passwords, on your personal and work computers and in the cloud.
There are two things to worry about with digital assets when you become incapacitated or die — who will own them and how will the owner get access to them. As for ownership, the safest course is the same as with hard assets — put them in a trust. It can be one specially created to hold digital assets or a revocable living trust. With digital assets, however, more is needed than title. Lack of access may make ownership irrelevant.
Therefore, you also need a document – paper or digital – that lists out all the pertinent identification and access information for all of your digital assets. Without such a list, your plan to pass those digital assets to your beneficiaries is very likely to fail because your executor or trustee cannot find or access them.
Your digital asset listing should contain all necessary identification all necessary access information for each of your on-line accounts: usernames, passwords, and security questions and answers. It should also indicate whether particular accounts have monetary value, and whether accounts should be closed or deleted at your death or disability or are intended to be passed on to others of your choosing. Your digital asset listing, whether on paper, flash drive, CD-ROM or other form, should be stored with your will and other valuable papers in a fire- and waterproof container such as a bank safe deposit box or a fire- and waterproof safe. The storage place does have to provide protection from fire or water because either is as likely to cause loss as the other in any home or office.
Once you have prepared your digital asset listing, it is vital to keep it current. Whenever you open a new account or change a password or security question, update your digital asset listing to include the new information. If you store your digital asset listing offsite, keep a copy at your home or office that you keep up to date and periodically duplicate it and refresh the copy held in fire- and waterproof storage. Add a tickler to your calendar or computer to at least monthly be reminded to update your digital assets listing.
As our world becomes increasingly “online” and “electronic” your digital assets will play a bigger and bigger part in your life and therefore in your estate plan.
If you do not have comprehensive digital asset titling and protection in your estate plan, your plan is in serious trouble. We can help. Just call us and make an appointment for a complete family wealth plan checkup at no charge.