From social media accounts to cryptocurrencies, digital assets are now a significant part of our lives, but many people overlook them in their estate plans. Failing to include these assets can leave your loved ones locked out of important accounts or unable to access valuable property after you’re gone.
In this guide, we’ll show you how to include digital assets in your estate plan step by step. From taking inventory of your online accounts to organizing secure access and updating legal documents, these strategies will help protect your digital legacy. If you’re just starting out, check out our guide on how trusts can help avoid probate or explore common mistakes in estate planning. Along the way, we’ll reference authoritative resources to help you safeguard your digital property for future generations.
By taking these steps today, you can ensure your digital assets are preserved, accessible, and passed on according to your wishes.
What Are Digital Assets and Why Do They Matter?
Digital assets are more than just online accounts they’re an integral part of modern life and can hold significant financial, sentimental, or practical value. Understanding what they are and why they matter is the first step toward protecting them as part of your estate plan.
Examples of Digital Assets
Digital assets encompass a wide range of property, including:
- Online Accounts: Email, social media profiles (e.g., Facebook, Instagram), subscription services (e.g., Netflix, Spotify), and cloud storage platforms (e.g., Google Drive, Dropbox).
- Cryptocurrencies and Digital Currencies: Bitcoin, Ethereum, NFTs (non-fungible tokens), and other blockchain-based assets.
- Digital Files: Photos, videos, music libraries, documents, and other personal or professional files stored online.
- Domain Names and Websites: URLs you own or operate, as well as any revenue-generating websites or blogs.
- Online Businesses: E-commerce stores, digital products, or income streams tied to platforms like Etsy or Shopify.
For example, a family photo album stored in Google Photos holds sentimental value, while a domain name generating ad revenue has financial worth. Both are digital assets that deserve attention in your estate plan.
Why Digital Assets Matter in Estate Planning
Ignoring digital assets can lead to unintended consequences for your heirs:
- Lost Access: Without proper planning, loved ones may be unable to access important accounts like retrieving cherished photos or managing a business.
- Financial Loss: Cryptocurrencies, domain names, and online businesses can represent substantial wealth that could otherwise be lost or inaccessible.
- Security Risks: Unsecured accounts may become targets for fraud or identity theft after your passing.
For instance, imagine leaving behind a valuable cryptocurrency wallet but no instructions for accessing it. Your heirs might lose access to thousands or even millions of dollars simply because they don’t know where to start.
The Growing Importance of Digital Assets
As technology evolves, so does the scope of our digital footprints. A 2023 report by Wealth Counsel found that 68% of Americans now consider digital assets important in estate planning, yet only a fraction actively include them. By addressing this gap, you not only protect your legacy but also ensure your loved ones aren’t left scrambling to piece together your digital life.
For more insights into the growing role of digital assets, authoritative resources like The National Cybersecurity Alliance provide guidance on securing and managing your online presence.
Understanding the value of your digital property is the foundation of protecting it and ensuring it’s included in your estate plan.
Create a Comprehensive List of Your Digital Property
Taking inventory of your digital assets is the first and most crucial step in including them in your estate plan. Without a clear record of what you own, it’s easy for valuable accounts, files, or property to be overlooked or lost after your passing. A thorough inventory ensures nothing slips through the cracks and provides a roadmap for your heirs.
Why Taking Inventory Matters
Creating a list of your digital assets helps you:
- Identify What Needs Protection: From sentimental photos to high-value cryptocurrencies, every asset deserves attention.
- Streamline Access for Heirs: A detailed inventory saves your loved one's time and frustration when managing your digital legacy.
- Prevent Loss or Mismanagement: Forgotten accounts can lead to financial loss, security risks, or even identity theft.
For example, if you own multiple email accounts, cloud storage subscriptions, or cryptocurrency wallets, documenting them ensures your executor knows where to start.
How to Take Inventory of Your Digital Assets
Here’s how to create a comprehensive and organized list:
1. Start with Online Accounts
Begin by listing all your online accounts, including:
- Email (e.g., Gmail, Outlook).
- Social media (e.g., Facebook, Instagram, LinkedIn).
- Subscription services (e.g., Netflix, Spotify, Adobe Creative Cloud).
- Shopping or payment platforms (e.g., PayPal, Venmo, Amazon).
2. Include Digital Files and Media
Document where your important files are stored:
- Photos, videos, and documents in cloud services like Google Drive, Dropbox, or iCloud.
- Music libraries, eBooks, or other purchased digital content.
3. Account for Financial and Business Assets
Don’t forget high-value digital property:
- Cryptocurrencies (e.g., Bitcoin, Ethereum) and NFTs.
- Domain names, websites, or blogs.
- Revenue-generating platforms like Etsy shops or affiliate marketing accounts.
4. Use Tools to Stay Organized
Managing your inventory doesn’t have to be complicated. Consider using:
- Spreadsheets: A simple Excel or Google Sheets document works well for tracking account details.
- Password Managers: Tools like LastPass or 1Password securely store login credentials and notes.
- Digital Legacy Planners: Apps designed specifically for organizing digital assets, such as Ever plans or Lantern.
Best Practices for Managing Your Inventory
To keep your list secure and up to date:
- Update Regularly: Add new accounts or assets as they arise and remove outdated ones.
- Store Securely: Avoid keeping sensitive information like passwords in unsecured locations. Use encrypted files or password managers.
- Avoid Including Passwords in Your Will: Wills become public record during probate, so storing sensitive details there compromises security.
For instance, imagine leaving behind a neatly organized spreadsheet that lists your domain name, its renewal date, and instructions for transferring ownership. This simple step ensures your heirs can maintain the asset without disruption.
For more guidance on managing and securing digital assets, authoritative resources like The National Cybersecurity Alliance offer practical tools and tips to help you stay organized.
By creating a comprehensive inventory, you lay the foundation for protecting your digital legacy and ensuring your heirs have the information they need to manage it effectively.
Ensure Heirs Can Access Your Accounts
Once you’ve taken inventory of your digital assets, the next step is ensuring your heirs can access them when needed. Without proper planning, even the most comprehensive list of accounts and files can leave your loved ones locked out or worse, vulnerable to security risks. This step focuses on organizing access information securely and providing clear instructions for managing your digital legacy.
Why Secure Access Matters
Failing to plan for access can lead to several challenges:
- Locked Accounts: Heirs may be unable to retrieve important files, photos, or financial information.
- Lost Assets: Cryptocurrencies, domain names, or online businesses could become inaccessible if credentials are lost.
- Security Risks: Unsecured access details can expose your accounts to fraud or misuse after your passing.
For example, imagine leaving behind a valuable cryptocurrency wallet but no way for your heirs to access it. Without secure instructions, those assets could be permanently lost.
How to Organize Access Information
Here’s how to ensure your heirs can access your digital property safely and efficiently:
1. Use a Password Manager
Password managers like LastPass, 1Password, or Dashane are excellent tools for securely storing login credentials.
- Benefits:
- Centralized storage for usernames, passwords, and recovery information.
- Encrypted security to protect sensitive data.
- How It Works: Share the master password or emergency access feature with a trusted executor or attorney.
2. Create a Letter of Instruction
A letter of instruction provides detailed guidance for managing your digital assets. Include:
- Account names, usernames, and recovery methods (but not passwords store these separately).
- Specific instructions for each asset (e.g., “Close this account,” “Transfer ownership of this domain”).
- Emergency contacts for tech support or account recovery (e.g., platform-specific help centers).
3. Designate a Digital Executor
Appoint someone you trust to manage your digital legacy. This person should:
- Understand your wishes for each asset.
- Be tech-savvy enough to navigate online platforms.
- Act responsibly to prevent misuse or unauthorized access.
4. Leverage Platform-Specific Tools
Many online services offer features to help users plan for their digital legacy:
- Google Inactive Account Manager: Allows you to designate a trusted contact to access your account after a period of inactivity.
- Facebook Legacy Contact: Lets you assign someone to memorialize or manage your profile after your passing.
- Apple Digital Legacy: Provides access to your iCloud data through designated “Legacy Contacts.”
Best Practices for Securing Access
To balance accessibility and security:
Avoid Writing Down Passwords: Physical notes can be easily misplaced or stolen. Use encrypted tools instead.
Enable Two-Factor Authentication (2FA): While 2FA adds a layer of security, provide backup methods (like recovery codes) for your heirs.
Store Instructions Separately from Credentials: Keep your inventory list and password manager separate to minimize risk.
For example, you might use a password manager to store account credentials, then leave a secure letter of instruction with your attorney detailing how to access the manager itself. This layered approach ensures both security and clarity.
For more tips on securing and managing digital access, authoritative resources like The National Cybersecurity Alliance provide practical advice on safeguarding your online presence.
By organizing access information securely, you empower your heirs to manage your digital assets responsibly and ensure your legacy remains intact.
Formalize Your Plans in Legal Documents
Once you’ve taken inventory of your digital assets and organized access information, the next step is formalizing these plans in your estate planning documents. Including digital assets in your will or trust ensures they’re legally recognized and protected and provides clear instructions for your heirs.
Why Legal Documentation Matters
Without formal documentation, your digital assets may be overlooked or mishandled after your passing. For example:
- A will that doesn’t mention your cryptocurrency holdings could leave those assets in limbo.
- Heirs may struggle to gain access to accounts or transfer ownership without explicit legal authority.
By addressing digital assets in your estate plan, you ensure they’re distributed according to your wishes whether that means transferring ownership, preserving content, or closing accounts.
How to Include Digital Assets in Legal Documents
Here’s how to incorporate your digital property into your estate plan:
1. Update Your Will or Trust
Clearly list your digital assets and specify how they should be handled. For example:
- "Transfer ownership of my Etsy store to [Name]."
- "Preserve family photos stored in my Google Drive account."
- "Close all social media accounts except for my Facebook profile, which should be memorialized."
2. Appoint a Digital Executor
Designate someone responsible for managing your digital legacy. This person can be the same as your primary executor or a separate individual with tech expertise. Include their role and responsibilities in your will or trust.
- Example: "I appoint [Name] as my digital executor to oversee the management and distribution of my digital assets as outlined in this document."
3. Provide Specific Instructions
Avoid vague language by detailing your wishes for each asset. For instance:
- "Transfer my domain name [Domain.com] to [Business Partner’s Name]."
- "Grant my spouse access to our shared iCloud account to retrieve family photos."
- "Donate proceeds from the sale of my NFT collection to [Charitable Organization]."
4. Address State-Specific Laws
Many states in the U.S. have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) , which governs how executors and other fiduciaries can access digital accounts. Familiarize yourself with these laws to ensure compliance.
- Example: Under RUFADAA, you can grant permission for your executor to access certain accounts by including specific language in your will or trust.
Practical Examples of Legal Planning
Here are some real-world scenarios to illustrate how this works:
- If you own a blog generating ad revenue, specify whether it should be transferred to a family member or sold, with proceeds going to your heirs.
- For sentimental assets like family photos, designate a trusted individual to manage and distribute them.
- For high-value assets like cryptocurrencies, provide detailed instructions for accessing and transferring ownership.
Work with an Estate Planning Attorney
While simple updates can often be handled independently, complex estates may benefit from professional guidance. An experienced attorney can help you:
- Draft legally binding documents that address digital assets.
- Navigate state-specific laws and platform policies.
- Ensure your plan aligns with your overall estate goals.
For authoritative advice on estate planning laws, resources like The American Bar Association (ABA) offer insights into creating comprehensive and legally sound estate plans.
By formalizing your plans in legal documents, you ensure your digital assets are protected, accessible, and passed on according to your wishes.
Conclusion
Including digital assets in your estate plan is no longer optional it’s essential for protecting your online presence, valuable accounts, and sentimental files for future generations. By taking inventory of your digital property, organizing secure access, and formalizing your plans in legal documents, you can ensure your heirs have the tools they need to manage your digital legacy responsibly.
Now is the time to take action. Start by creating a comprehensive list of your digital assets and updating your estate planning documents to reflect your wishes. If you’re unsure where to begin, check out our guide on how trusts can help avoid probate or explore common mistakes in estate planning. These resources can help you build a robust plan that protects both your physical and digital property.
Stay tuned for our upcoming post on how to create a lasting legacy through charitable giving and ensure your impact extends beyond your lifetime.
By taking these steps today, you can safeguard your digital assets, minimize confusion for your loved ones, and leave a legacy that reflects who you are.