Digital Estate Planning: Protect Your Online Assets
Traditionally, estate planning covered the distribution of tangible assets like homes, cars, and jewelry; however, digital assets have introduced a new dimension to estate planning known as digital estate planning. So, whether you have a vast collection of digital assets or a few significant ones, this article is your guide to handle them wisely and securely.
Are you looking for estate planning help in the Asheville area? Register for one of our upcoming free estate planning seminars to get a head start on building a comprehensive estate plan and get your digital estate planning questions answered by the professional estate planners at Craig Associates, PC, or call us at (828) 258-2888 for an initial case evaluation.
- Why choose us?
Why choose us?
Don’t take our word for it, here’s what actual clients in your community have to say:
Craig Associates, PC did an amazing job guiding us through the process of setting up our trust. From our initial meeting with Chris, the pre-planning sessions we had with Patty, and the efficient coordination and communications conducted by Shelly, we knew we were in good hands. They each spent the time to fully explain the process and the documents involved and answered all of the many questions we had. We would highly recommend their office for anyone needing estate planning services.Greg A. | Asheville, NC
Learn some digital estate planning legalese.
Digital Property: Any online or digital asset, such as websites or virtual goods, considered in digital estate planning.
Password Manager: A tool used in digital estate planning to store and manage passwords, aiding in the transition of digital assets to heirs.
Beneficiary: The individual who will receive digital assets and online accounts under a digital estate plan.
Fidelity: A principle that emphasizes trustworthiness and accuracy in managing digital assets within the estate.
Legally Binding: A term that denotes the enforceability of digital estate planning documents by law.
Tax: Refers to potential tax implications or liabilities associated with the transfer of digital assets.
The Cloud: Online storage space where digital assets might be stored and hence considered in digital estate planning.
Probate: A legal process that might include the authentication and distribution of digital assets.
IaaS (Infrastructure as a Service): A cloud computing service that could be relevant to the digital assets management within an estate.
RIA (Registered Investment Adviser): An entity that might assist with managing digital financial investments within the estate.
2FA (Two-Factor Authentication): A security measure for digital accounts that must be considered when planning access for heirs.
Financial Advisors: Professionals (or Investment Advisers) who may assist with finances and the planning of digital financial assets within an estate.
Return on Investment: A consideration of the profits or gains from digital investments in an estate.
PaaS (Platform as a Service): A cloud platform or database that may host digital properties or applications considered in estate planning.
Configuration Management: A process of tracking and controlling changes in the digital assets that might be relevant in digital estate planning.
Intestate: A state of having died without a valid digital estate plan, leading to legal complexity.
Authenticator: A security mechanism for a digital account that must be considered in estate planning.
Digital Executors: Individuals responsible for managing digital assets according to the estate plan.
One-Time Passwords: Temporary codes that might be used in accessing digital accounts and must be considered in estate planning.
ROI (Return on Investment): Refers to gains from digital investments, an essential consideration in estate planning.
Intestacy: The condition of an estate when there is no valid will, which includes digital assets.
Conflicts of Interest: Situations that may arise in managing digital assets.
Marketplace: Online platforms where digital assets might be traded or held.
License: Legal permissions related to digital properties and software.
Online Accounts: Various digital profiles and subscriptions considered essential in digital estate planning.
Legacy Contact: A designated individual who can manage digital accounts like social media after death, a key aspect of digital estate planning.
What is Digital Estate Planning?
Digital estate planning organizes and makes arrangements for your digital assets in the event of death or incapacitation. Digital assets have become a significant component of our daily lives and it’s critical to incorporate into contemporary estate planning.
A digital asset is any item of personal property that exists in a digital format and should be incorporated into an estate plan, including:
- Digital files
- Digital photos and videos
- Online communities
- Digital businesses
- Social media accounts
- Domain names
- Online banking accounts.
You can ensure that your digital assets go to the correct individuals through digital estate planning.
The Importance of Digital Estate Planning
When almost every aspect of our lives is digitized, omitting digital estate planning can result in a serious mishap. Digital estate planning ensures that important assets are not lost, such as photos, videos, and important documents, which may be locked away on digital platforms when people become incapacitated or pass on. These assets may hold sentimental or monetary value to family and friends.
Digital estate planning also lessens stress in the event of the sudden death or incapacitation of the digital asset holder—your family members won’t be trying to piece together your digital life.
Lastly, digital estate planning protects your privacy. A digital estate plan stipulates who can access these assets and how they should do it to keep prying eyes out of your business and to prevent digital assets from falling into the wrong hands.
Legal Aspects of Digital Estate Planning
Understanding the legal aspects of digital estate planning can give you peace of mind and ensure your digital assets are properly managed after your death.
Laws Related to Digital Estate Planning
Currently, there are no federal laws in the United States specifically addressing digital estate planning. Most states have adopted a version of the Uniform Fiduciary Access to Digital Assets Act (UFADAA), which allows executors, trustees, and agents under a power of attorney to manage digital assets in a similar way to tangible assets.
Common Legal Challenges in Digital Estate Planning
The most common issue is gaining access to a deceased person’s digital assets due to privacy laws and terms of service agreements. Digital assets may also exist in multiple jurisdictions, making it complicated to establish authority and navigate various laws. Proper digital estate planning can avoid time delays in accessing digital assets and save your loved ones time and stress.
Privacy and Data Protection Legislation
Privacy is a chief concern when digital estate planning. This issue is even more complex when we consider data protection laws like the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) explicitly protect the personal information of living individuals—which creates potential hurdles when transferring digital assets upon death without effective digital estate planning.
Steps in Digital Estate Planning
Digital estate planning identifies your digital assets, determines what should happen to them after your death, and makes arrangements to ensure your wishes are carried out.
- Identify digital assets. The first step in digital estate planning is to inventory all of your digital assets.
- Organize digital assets. Document the locations of your digital assets, as well as usernames, passwords, and security question answers to make it easier for your executor to manage them.
- Decide the future of digital assets. Consider who should get which assets, and if any assets should be deleted or managed in a certain way.
- Incorporate digital assets into a will or trust. This includes appointing a digital executor, providing instructions for accessing and managing your digital assets, and detailing how privacy and data protection laws should be handled. These documents should also be updated regularly to include newly acquired digital assets.
Digital Estate Planning FAQs
How can I get started with digital estate planning?
Our free estate planning seminars are designed to lay the groundwork for effective, legally-sound estate plans and are a great starting point. You can also make an appointment with a professional digital estate planning attorney to build a comprehensive estate plan for you!
Are there legal issues involved with digital estate planning?
Yes, due to issues related to privacy and confidentiality, some companies may refuse access even to a legal executor. Choose an experienced estate planner who understands and accounts for these complexities in digital estate planning.
What is Fiduciary Access in digital estate planning?
The UFADAA grants legal rights to fiduciaries, including conservators, trustees, personal representatives of a decedent’s estate, and attorneys, to access, manage, distribute, copy, or delete digital assets and accounts. It helps manage digital assets while also safeguarding a user’s private communications from unwarranted disclosure.
Secure Your Digital Assets with Professional Digital Estate Planning
The expert estate planners at Craig Associates, PC have helped people all across North Carolina build personalized estate plans to fit their diverse and unique estate needs for over 18 years. Learn more at one of our free estate planning seminars or call us at (828) 258-2888 to get started today.