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### The Emergence of Digital Assets
In the era of digital revolution, our lives have become inextricably linked with the digital world. From social media profiles and emails to digital photos and videos, cryptocurrencies, and even intangible assets like domain names, we generate and accumulate a broad range of digital assets that hold tangible, sentimental, and commercial significance. Given the rising prominence of these assets, they can no longer be ignored in the estate planning process.
As our online presence continues to expand, it’s becoming increasingly important to consider what will happen to these digital assets upon our death. Lack of planning can lead to significant difficulties for loved ones, including potential loss of property, hurdles in accessing crucial information, and even identity theft.
### Understanding Digital Estate Planning
Digital estate planning is a relatively new aspect of estate planning that involves identifying, cataloguing, and preparing for the transfer or disposal of digital assets upon death. This practice is becoming increasingly pertinent as our digital footprints expand and digital assets gain in value.
Similar to traditional estate planning, where we designate inheritors for our tangible assets like houses, cars, and bankers, in digital estate planning we assign beneficiaries for our digital assets. This process includes providing instructions for accessing, managing, or closing digital accounts and transferring digital assets post-mortem.
### Why Digital Estate Planning is Important
Although digital assets may hold no physical presence, their value, both emotional and monetary, can be immense. For instance, digital photos may hold cherished memories, while cryptocurrencies like Bitcoin may hold significant financial value.
Moreover, sensitive information contained within emails and social media accounts can be exploited if it falls into the wrong hands. Taking charge of these assets can prevent fraudulent activities, ensuring that digital property is used as per the decedent’s wishes.
### Steps to Create a Digital Estate Plan
#### Inventory of Digital Assets
The first step in preparing a digital estate plan involves taking an inventory of all digital assets. These can include:
– Emails
– Social media profiles (Facebook, Twitter, Instagram, etc.)
– Online banking and brokerage accounts
– Digital wallets and cryptocurrency
– Blogs and personal websites
– Digital photographs, music, books, and other media
– Accounts for sharing economy platforms (like Uber, Airbnb)
– E-commerce accounts (like Amazon)
– Rewards points from credit cards, hotels, airlines
#### Determine The Value
Not all digital assets have financial value, but they can hold sentimental or practical value. It’s important to assess the value of each asset and decide what you want to be done with it after your death.
#### Designate Digital Executor
A digital executor is someone who will carry out the wishes set forth in your digital estate plan. This person should be tech-savvy and should be able to handle the responsibility and trust that comes with the role.
#### Provide Access
In order for the digital executor to act upon your wishes, they need to have access to your digital assets. This means providing them with usernames, passwords, and other necessary security information.
#### Create Instructions
Each digital asset should have clear instructions for the digital executor. This can include whether to delete, transfer, or memorialize the account or asset.
### Challenges in Digital Estate Planning
While digital estate planning is necessary in the digital age, it does come with its share of challenges. For example, privacy laws such as the General Data Protection Regulation (GDPR) in the European Union or the Stored Communications Act in the US can limit access to digital assets by a third party.
Also, terms of service agreements we accept when creating an online account often forbid the sharing of account details including passwords.
However, legislation is changing, and the Uniform Fiduciary Access to Digital Assets Act (UFADAA) in the US aims to provide legal authority for executors to manage digital assets in the same way they manage tangible assets.
Digital estate planning is a complex, multi-faceted issue. Yet, as our lives grow increasingly digitized, it’s an inescapable task. By understanding its importance and stepping up to the responsibility, we can ensure that our digital legacy is handled in accordance with our wishes, providing ease and peace of mind for ourselves and our loved ones.
