The proliferation of the Internet and personal computing over the past 20 years led to the emergence of a third, more abstract class — the digital asset. Moving into the future as pioneers of the digital age, we must become more mindful about what happens to our digital assets when we are gone.
Digital assets include websites, blogs, social media accounts, documents, photos, videos or any other type of resource stored in a digital format. The term “asset” as we use it here could mean something that is financial in nature (e.g., an income-generating website), but it doesn’t have to be an item that gets included on a balance sheet. Digital assets whose value is intangible, like an online photo album or family tree, can be equally as important to family members.
Likewise, the usernames and passwords for all of your online accounts can be critical to the smooth administration of your estate and ability of a surviving family member to access financial resources as painlessly as possible.
In most of our current estate plans, we contemplate what will happen to financial and physical assets. Few of us have spent much time thinking about what we would like to happen with all of our digital assets. With more and more of our lives being captured in digital format, it will become increasingly more important to be aware of the impact these assets have on your surviving friends and family and be more explicit about your wishes with respect to them. As you consider your own personal digital assets and communication with respect to them, it’s important to think about two primary questions: where are they and what do I want done with them?
Personal recordkeeping used to be relatively simple. You may have had a file cabinet or safe at home and a safe deposit box at your local bank. A spouse or executor could find most of your important documents and information by searching through these common locations. That is not the case with digital assets. The number of possible storage locations for digital information is endless. In order to keep your digital life organized and accessible, it is critical that you centralize the storage of this information and provide access to it to those who will be administering your estate.
There are many utilities out there that have been built to aid in the storage of usernames, passwords and secure notes. Tools like LastPass and Dashlane have become very useful in the management of digital assets. They will keep you organized while you’re alive, but you can also provide a single username/password to someone else who will then have access to all your secure information should something happen to you. This is much easier than keeping a physical list and updating it periodically (and remembering where it is).
Perhaps even more important than the storage of usernames and passwords, these tools also allow you to store secure notes and instructions. This can be valuable if you need to save instructions for how to open a safe (including the combination), attach documents to a note (e.g., wills, healthcare directives), or capture details about how to access insurance policies.
The bottom line is that those who are important to you should have access to most of your digital assets and that access should be as simple and straight forward as possible.
Once people know where to find the assets, they will want to know what to do with them. For most of your digital assets the “what” is obvious and implicit. If you provide access to a bank account or investment account online, then the login information is simply a window into a financial asset that will be distributed according to your estate planning documents. The “what” becomes more important for those assets where there is some uncertainty about what should be done with them.
These types of issues may seem abstract or trivial in nature, but questions like “should I leave up her Facebook page” can become very emotional and contentious for surviving family members. Many social media websites have become aware of this issue and have established policies to aid with the execution of the decision. At Facebook, for instance, a profile can be “memorialized” or removed with the request of a verified family member. If this decision is something you have a strong opinion about, then make sure your wishes are known to your family members, preferably in writing.
Digital assets that are more financial in nature, such as income-generating websites, will require more explicit instruction. If they are large enough in size, they may already be included in an estate plan; however, a blog that generates $500 in ad-click revenue each month is still meaningful enough to address. Consider who that asset will be left to and whether or not that person is capable to manage it in the future.
In conclusion, don’t forget or neglect your digital assets when planning for the distribution and administration of your estate. You can make the lives of those you leave behind much easier by organizing your digital world and making sure they have access to the important pieces of it. We all know how frustrating it can be when you forget your own username or password; imagine how difficult that can be for a family member still grieving. Your digital footprint will be left behind when you pass away, so make sure family members know how you wish that footprint to look.
Jeffrey Howard is a principal at Diversified Trust. For more on this subject, go to this link: https://bit.ly/2HZ04yq