What You Should Know about Digital Assets in the Estate Planning Process
In this increasingly online world, people do not look at their digital assets in the same way they do their physical assets. However, everything from domain names to social media accounts can be considered assets. As you undertake the process of estate planning, you should be sure to include your digital assets.
Making a list of your digital assets can help you think more holistically about your asset plan and how to pass them along to other people once you are gone. Your digital assets can be just as important as physical assets, such as your home, so include them when you speak to friends and family members about your plans.
Other digital assets include Bitcoin and other cryptocurrencies, digital media, rights to media, blog content, video channels, and more. If these assets are monetized in some way, they must be included in your estate plan. However, even non-monetized digital assets can have sentimental value, so do not exclude them from your plans just because they are not worth money.
The Legal Standing of Digital Assets
From a legal standpoint, digital property is just like any other type of property; it can be passed along in an estate plan. At the same time, the laws covering digital property are evolving quickly to keep pace with changing approaches to social media sites and other types of online technologies. Because of this, gaining access to digital assets can prove difficult even if you have indicated that someone is supposed to inherit them. Thus, you need to think about the potential obstacles to assuming ownership of these properties that heirs may face and figure out paths around them. For example, passwords are a major obstacle. While some may be easy to bypass, others can be impossible to crack. Find a way of sharing passwords with your heirs.
Another issue to consider is data encryption, which adds another layer of protection on top of a password. Encryption scrambles data in a particular location to make it impossible to use for anyone who does not have a key. Cell phones have become heavily encrypted devices, especially if data is stored on the cloud. Without a password, accessing these heavily encrypted devices can be downright impossible. If you do not want to give access to an entire device, be sure to transfer the digital asset to a more accessible location. Ultimately, heirs need any easy way to access the asset, and you should provide that for them.
Criminal Law and Data Privacy Concerns
Both federal and state laws prohibit people from accessing computer systems and private data without authorization. These laws are meant to protect you from identity theft and other forms of fraud. However, they also make it difficult to pass along digital assets that are not explicitly mentioned in an estate plan.
The law is evolving to keep up with the digital world, but there are a lot of gray areas in terms of privacy and inheritance of digital assets. This underlines the importance of giving people explicit authorization to access digital data that is meant for them. Doing this is the best way to ensure your asset gets passed along as you intend without any legal ramifications for the heir.
Furthermore, federal data privacy laws make it difficult for online account service providers to pass along digital content from an owner to someone else without explicit consent. In other words, social media sites and other companies can lock the content of your account once you pass if you have not provided written, lawful consent for someone else to gain access. The problem is that this often means your loved ones no longer have access to messages, photos, and other information that is stored in the cloud. Going to court for access has no guarantee of success and could prove very costly.
How to Include Digital Assets in Your Estate Plan
With all these considerations in place, there are some specific steps to take to protect your digital assets after your death. With some planning, you can be sure that these assets get passed along without significant problems. As mentioned, the first step in planning is to make a list of your digital assets and share them with loved ones. You may want to include important passwords on this list to make access easy. Store the list in a secure location so that it can be easily accessed if needed. With the list, check the terms of agreement to figure out what you own and what you license. Not all digital assets are meant to be passed along to other people, so be sure to learn the limitations.
Another important step to take is backing up stored data in the cloud. Putting this information on a local computer or storage device is the best way for fiduciaries or members of the family to access them with ease. Many services make it possible to download all assets on a blog or something similar in a single click. Relying on the cloud alone for backup can lead to access issues. You should also create a legal document that gives lawful consent for providers to hand over digital assets to the appropriate people. When doing this, you can choose exactly what data to hand over. You may choose not to hand everything over, which is fine so long as you make your intentions explicit in a legally binding document.