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Staying on Top of Digital Assets
The digital age we live in has changed how we communicate, work, and socialize. New ways of doing things require agility and a willingness to adapt to these changes. That is particularly true when it comes to managing our finances. As more activity has moved online, many people have accumulated an array of digital assets that they should integrate into their financial and estate planning.
We are all familiar with tangible personal assets - houses, cars, home goods, boats, jewelry, collectibles, and the like. On the financial side, your assets may include cash, savings and checking accounts at a local bank or credit union, retirement accounts, and various investments, such as stocks and bonds. But stop and think about everything you do online. Do you also have some digital assets?
Digital assets can be many things. Here are some examples:
- Online financial accounts, such as a PayPal account
- Cryptocurrencies and digital tokens
- Business accounts, such as customer databases
- Domain names that you own
- User accounts, such as social media and email accounts
- Content, including photos, videos, design files, digital paintings, documents, presentations, and books
- Reward programs, such as credit card "cash back" programs, frequent flier miles, and points for free nights in hotels
Estate Planning Considerations
When you are planning your estate, you will need a complete list of all your assets. For digital assets, you'll want to include web addresses, usernames, and passwords, along with the devices (computers, smartphones, etc.) you use for access. You may want to consider using an online password manager to help keep your data safe.
Creating a list is only the beginning. You will want to consult your attorney to determine how you can give your executor the ability to access, manage, and ultimately transfer your digital assets to your loved ones. This will depend on the laws of your state as well as the provisions of terms-of-service agreements with your digital service providers. Some accounts have specific requirements to ensure access to an account by an executor or other fiduciary. An Important Step Understanding everything you own - both traditional and digital assets - is a critical financial and estate planning step.
An experienced financial professional can help you identify your assets and guide you in your efforts to create and implement an effective plan. Contact us now.