Even people who think they’ve ticked off all of the usual boxes on their estate-planning to-do lists may have overlooked an increasingly important component of the process: ensuring the proper management and orderly transfer of their digital assets after they die or become disabled.
Beyond the tangible assets in your life that you feel should be protected by your estate plan, have you considered the not-so-tangible assets as well? Your virtual or digital assets need protected too. And unfortunately there aren’t clearly defined legal steps to take for the management of one’s digital estate in the event of incapacity or death.
Since it would seem only logical (let alone practical) to make legal plans for the management and succession of our digital estates, what is one to do without a clearly defined body of law on the subject?
There is a patchwork of laws in some places, and some services have thought ahead to help those planning their estates. Nevertheless, the burden inevitably falls on the planners and their loved ones to really come to terms with those important digital assets, whether personal (a Facebook account) or downright valuable (a bank account or even a registered domain name).
The first step in planning your digital estate is to recognize the need. Thereafter, consider the following four step process outlined in a recent Morningstar article aptly titled “Do You Have a Plan for Your Digital ‘Estate’?”:
- Do a fire drill: if you lose your electronic assets, or if someone takes them away, or if a loved one can never lose them again (and so on and so forth), then what is lost? What would I want a loved one to have access to?
- Take an inventory: list it out, [securely] document the passwords, and make your heirs aware of your inventory.
- Back it up: create a backup of any digital assets you can, whether cloud based, locally stored, or otherwise.
- Put your plan into writing: if it is not written down and available then it is not a plan at all, but rather a hope, and all the more so with digital assets that do not have common law precedents to guide your heirs.
Reference: Morningstar (October 3, 2013) “Do You Have a Plan for Your Digital ‘Estate’?”
For more information on estate planning, please visit my estate planning website.
