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A rapidly growing percentage of our assets, memories, and personal arrangements now live in the digital sphere. As a result, managing digital assets and inheritance has become an increasingly critical aspect of estate planning. This involves creating strategies to handle online finances, social media profiles, emails accounts, digital photos, and other digital assets after death. Without an appropriate plan in place, accessing these digital assets can become legally complex for heirs, to the point that they may remain inaccessible forever.
First, it’s essential to understand what digital assets encompass. Beyond social media profiles and email accounts, your digital assets include online bank accounts, virtual wallets, digital photos, music, e-books, website domains, blogs, and all the other various data that are stored in the cloud. Moreover, with the advent of cryptocurrencies like bitcoin, Ethereum, and more, managing these assets posthumously has added another layer of complexity to the discussion of digital estate planning.
To ensure a smooth transition, determine what you own digitally. Create an inventory of your digital life, including all your devices, online accounts, and digital properties. Specify any valuable or significant assets, such as an online business or blog, and financial assets such as PayPal, stocks, or cryptocurrencies. For each, recording the login credentials, including usernames, passwords, and security questions, is crucial. You may also include steps to access two-factor authentication if you’ve set that up.
However, it’s crucial to remember that due to privacy laws, some companies may not allow anyone else to access your accounts, even if they hold your password. This means you’ll need to check the terms and conditions or consult with each platform individually.
Appoint a digital executor. Pick someone who’s not only reliable but also has a decent understanding of digital platforms. Your digital executor will be responsible for closing your online accounts, preserving files and photos you wish to pass on, and carrying out a plan for your digital presence after you’re gone. Make sure they have a copy of your digital asset inventory, but be careful how you choose to share it as this document will become a target for cybercriminals.
In terms of legal procedures, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) is a law that has been adopted by most US states. RUFADAA allows an individual to grant an executor, agent, or trustee legal authority to manage digital assets in the same way they would physical assets. This ensures they have the legal ability to access, control, or copy your digital assets upon your death.
Digital assets also involve the financial domain, especially when it comes to cryptocurrencies. Many people maintain vast amounts of digital currency, like Bitcoin, Ethereum, or other altcoins. In such cases, mechanisms like setting up a dead man’s switch can come handy.
A “dead man’s switch” is essentially a safety switch that activates when the human operator becomes incapacitated, such as through death. If appropriately set up, it can automatically send an email containing wallet passwords to your digital executor or heirs if you fail to respond to the program’s check-in prompts.
In short, while digital assets and inheritance planning can seem daunting, it’s a necessary step in today’s digital world. It’s wise to consult with a legal professional well-versed in estate law to seek advice tailored to your specific circumstances, to ensure all assets are properly secured for your legacy.
