An Overview of Digital Estate Planning

What is Digital Estate Planning?

Digital Estate Planning is the process of organizing, securing and designating access to your digital assets to ensure these assets are managed according to your wishes after your passing. Digital assets include online financial accounts, social media profiles, emails, cloud storage, cryptocurrencies, and other digital properties. It is important to consider naming a digital executor to carry out your wishes for your digital assets. A well-designed estate plan helps prevent identity theft, protects your online profiles and legacy, it also ensures that important and sensitive information remains accessible to loved ones or to designated individuals.

Why is Digital Estate Planning Essential?

In today's digital world, the lives of millions of people are online, and it only increases day by day. Our digital assets hold both financial value and emotional value. Organizing your digital assets can help your loved ones and executor better manage your estate. Digital estate planning ensures that the valuable digital assets remain valuable, and it ensures that these assets are properly managed and are accessible to the designated people after your passing.

Why Should You Plan Your Digital Estate

Digital estate planning is a crucial aspect in today’s life and without a plan in place, it will be hard for your loved ones to have access to important online accounts. Without a plan, digital finances and personal data remain vulnerable to bad actors and in other cases, this information could be lost if not well managed and protected.

Reasons why you should prioritize Digital Estate Planning.

• Data Loss Prevention: Important documents such as photos and memories stored online could become inaccessible if there is no proper planning in place to safeguard them. Many cloud storage require passwords or multi-factor authentication, which can be difficult to retrieve without instructions, which a plan can provide.
• Financial Asset Security: Financial accounts including online banking, cryptocurrency, and investment accounts need designated access to ensure wealth is not lost. Some financial platforms may need legal proceedings to transfer funds and without a digital estate plan, assets may remain unclaimed.
• Ease the Burden on Loved Ones: Managing a deceased person’s digital estate can be overwhelming. Providing guidance on how estates should be run can reduce stress and eliminate the confusion that comes with it. It can also prevent legal disputes.
• Sensitive Information Protection: Digital assets contain personal, business or medical information, which is very sensitive. Without a plan, unauthorized individuals may access and misuse this information, thus causing privacy and security risks.
• Compliance with Legal and Service Provider Risk: Platforms have unique policies regarding deceased users. Some accounts are designed to be accessed by designated heirs, while others are required to bring legal documentation. A digital estate plan ensures compliance with these policies to ensure asset transfer.

How Digital Estate Planning Works

Step One: Identity Your Digital Assets

• Compile a list of your digital assets.
• Social Media accounts
• Subscription Services
• Email Accounts
• Online Banking Accounts
• Credit card accounts
• Utility accounts
• Contacts Lists
• Shopping Accounts
• Photo and video sharing and storage accounts
• Smartphone, Computer, tablet or cloud data
• Existing digital collections
• Websites or blogs you maintain
• Online marketplace stores
• Domain names
• Text, graphic and audio files (or other intellectual property)

Step Two: Understand Accessibility Issues

A major challenge your beneficiaries may come across when dealing with your digital assets is account protection . Accounts will be protected by private passwords. They may also be protected by laws surrounding data privacy, unauthorized access and computer systems. The terms-of-service agreements of online services may add more restrictions on access as well. If there are no specific instructions regarding who can access your accounts and how, your loved ones may not be able to recover digital assets legally.

So for each digital asset, it would be necessary and advisable to document the following:

• Account username and associated email address
• Passwords
• Multifactor Authentication (MFA) methods
• Security Questions and backup recovery options
• Access to physical devices
• **Legal documentations and Permissions **

Service providers and the law are evolving in order to help handle digital assets after death. Many states have adopted the Revised Uniform Fiduciary Act to Digital Assets Act (RUFADAA), which lays out tiers for accessing digital assets

Tier 1: If a digital asset service provides a tool to designate what happens to assets after you pass, this designation guides what happens to the account. For example, if you used Google’s inactive account manager to designate a family member, this designation would guide what happens to your Google assets
Tier 2: If there is not any tool, then the owner’s directions in a will or legal document determine the handling of the account or asset
Tier 3: If neither of the first two scenarios are present, the terms-of-service agreement dictates how those accounts can be accessed. As mentioned, those agreements often restrict access to the original owner.

Step Three: Create Your Digital Estate Plan

• Inventory your logins: Make a list of assets with usernames and passwords and include the credentials so your designated executor can access them. It is important to remember that this information should not be included in your will, as it becomes a public document when you pass away. You can record them separately, and make sure your executor can have access to them. Password management software such as 1Password may be useful for this, as they can store multiple passwords but need only one password to access.
• Designate a Digital Executor: A digital executor is someone you trust to manage your digital assets in accordance with your wishes. It is important to consider the following when choosing a digital executor.
  • Choose a responsible person who understands digital security
  • Providing clear instructions on which accounts should be transferred, closed or preserved
  • Consider including your digital executor in your will or a legal document
• Outline your Wishes: It is Important to list your intentions for each asset or account. For example: Should your social media be deleted immediately or should the contents be archived? What to do with digital assets that have monetary value or generate revenue such as a website or an online storefront?
• Find Safe Storage: It is Important to store your digital estate plans in a secure location and give instructions for accessing those plans to the people who will be managing your estate after you pass away. This can include encrypted files, password managers or with your attorney.
• Additionally, consider making updates to your access details and account information as passwords and policy changes, and inform your trusted family members about the existence of your digital estate plan.