Despite the fact that most of our daily personal and financial transactions are now processed through web-based services such as email, Facebook, and online banking (to name a few), the true value of our digital assets is still often overlooked – and may be far more significant than we could imagine.
A simple file with a list of important business contacts (clients, suppliers, etc.), for example, may not translate into a wad of cash, but for heirs who want to maintain the family business, such virtual assets would be invaluable.
The worth of our wedding album, baby’s first photos, and all other photos and videos, which are now stored online? Priceless. Failing to advise our families of the passwords needed to access online accounts used in handling phone, credit card, and utility bills may deplete their inheritance or worse, leave them to deal with overdraft and delinquent fees.
These days, it is vital for us to take stock of all our digital assets when we plan for our estate. Here are three steps to get you started:
Make a list of all your virtual assets. To make sure that nothing is overlooked (something that seems insignificant to you may be precious to your family or essential to your business), list all the websites you’ve signed up for, particularly those that require a username and password. Next, think about all the files and software that you use on a regular basis. Finally, consider all digital media (books, movies, music) you have purchased, if these can be passed on to your beneficiaries. Here are some of the most common digital accounts and assets:
• Social media (e.g., Facebook, Twitter, Google+, blogs);
• Domain names and web servers;
• Photo/video storage (e.g., Flickr, YouTube);
• Online banking and other financial products;
• Reward programs (e.g., frequent flier miles);
• Online retail and payment systems (e.g., eBay, PayPal, Amazon, iTunes);
• Document storage (e.g., Dropbox, Google Docs); and
• Utility bills paid online.
Decide how you want to store and distribute these assets. The simplest method is to put it all on paper and store it in a safety deposit box or home safe. You may also want to consider naming a “digital executor” separate from your “main executor.” Ideally, your digital executor would be someone both tech-savvy and trustworthy — a person who knows how to access your online accounts, would have a good idea of their value, and whom you trust to access and dispose of your private information. You may want to take your “digital afterlife” a step further by signing up for one of the many websites that enable you to store your accounts and passwords online, to be distributed to your named beneficiaries at the time of your death. Some examples of those websites include Entrustet, Legacy Locker and Data Inherit.
Certainly, the law surrounding digital assets is still murky and none of the methods for storage and distribution (online or otherwise) are fool-proof. Despite these misgivings, you should still consider preserving your digital legacy as part of your overall estate plan. As with all other aspects of estate planning, the worst you could do is to not plan at all.
Make it a New Year’s resolution – it’s the right time of year!
Curtis Kaiser, JD/MBA, a certified specialist in estate planning, operates Kaiser Law Group, a boutique estate and business planning firm focused on helping families and small business owners efficiently plan for their futures.