Legacy Planning for Digital Assets

Digital assets represent a material part of our legacy and estate planning. We save cherished memories to the cloud and store valuable contacts and documents in our email, increasing our digital footprint every day. We may not consider these digital assets as part of our estate, but they may store critical information about our lives or have sentimental value. Despite the ubiquity of our online presence, many people underestimate the importance of planning for their digital estates.

A digital asset is generally anything that is created and stored digitally, is identifiable and discoverable, and has or provides value. When people hear the term digital asset, they think of cryptocurrency or Bitcoin. While cryptocurrency represents a specific type of digital asset, the term actually covers a much broader spectrum of resources.  

Common forms of digital assets include email, contact lists, music, social media, computer data, and cloud storage. As we become more interconnected through the internet and smart devices, our digital footprint is now much larger and more complex than ever.  

For example, what used to be the photo album that lived under the coffee table is now the album that lives on our cell phones. We share these memories with friends, family, or sometimes strangers as a part of everyday conversations. But what happens when we’re gone? Loved ones can’t reach under the coffee table to find them anymore, and if no one knows the password to your phone or cloud storage, these memories could be lost forever.

Your digital estate plan is not distinct from your overall estate plan. Rather, it’s an important element of it. As with a traditional estate plan, there are two primary areas to address: who gets what, and who’s in charge. 

As you are beginning to think about your digital legacy, start by gathering a list of your relevant accounts and login credentials. Similar to personal property listed in your trust or will, the goal is not to inventory everything you own, but rather the things you find valuable, financially or sentimentally. If you never sign in or post on your social media accounts, there’s no need to include that information in your list. Emails, on the other hand, often contain documentation, information, or photos that might be difficult to find elsewhere. 

Using a password manager can help streamline this process and keep data secure. When you are ready to share this information, there will be only one username and password to keep track of. As an added benefit, as you update your login credentials routinely, the password manager can keep track of these changes. 

In addition to login credentials, it can be helpful to categorize the types of assets that you are referencing, such as legal documents, email, and music storage. The more concise and organized your plan is, the easier it will be for your successors to execute. 

With an organized list, you can start to think about what you want to happen with each of these digital assets. You will want to outline instructions in your estate plan for accessing and managing each of these assets. This determines whether an account should be maintained or deleted, and also includes guidance for transferring information – such as family photos and videos – when appropriate. 

The second element of your digital estate plan is who’s in charge. When creating a plan, you will need to designate someone you trust to be your access person or digital executor. Usually, this is the same person as your executor/successor trustee, but it does not need to be. This person should also be familiar with the types of accounts you’re asking them to access. 

Some social media platforms allow you to assign a legacy contact. It often makes sense to name your digital executor as a legacy contact, to avoid confusion over who is responsible for settling these assets. It is important to note that if you designate a legacy contact directly with a platform, this election typically supersedes any legal document, such as a Will or Power of Attorney. For this reason, it’s important to periodically revisit your legacy contact with various providers to be certain that person is still who you want to be in charge. 

Once you have selected a digital executor, you will want to discuss your plan with them. You do not need to give them full access during your initial conversation, but it is a good idea to discuss your wishes and where to find all of the relevant information. You will also want to give them the opportunity to ask clarifying questions to make sure they are able to follow your wishes clearly and confidently.

As we continue to rely on technology to make our lives more convenient, our digital asset landscape is becoming more relevant than ever. Many existing estate documents do not explicitly address digital assets, which can create roadblocks for your digital executor in carrying out your wishes. Including language in your estate plan that covers digital assets is an increasingly common practice to provide clarity over who has legal authority.  

Your digital legacy is not distinct from the rest of your estate plan, it is instead a crucial part. With the proliferation of accounts, information, and files, managing your digital footprint can feel like a daunting task. Having a basic framework in place gives your successors the clarity and confidence to carry out your wishes.