When planning your estate, don’t forget your digital assets

Posted by Matt Simon on Mar 17, 2016

As the internet makes our lives easier, quicker and more data-driven, we're increasingly discovering that we own more assets that 'live' on the web.

This intellectual property could be anything from important photos stored on a website, social media profiles, documents hosted in the could, emails, pdf documents, online banking accounts, and much more.

Virtually everyone has some digital assets to track.

So what happens to all of that intellectual property if something happens to you?

Do your loved ones know how to access your digital assets when necessary?

If you haven’t taken the time to plan for your digital assets, your loved ones could find themselves unable to access your accounts.

And to make matters worse, if one of those accounts is compromised by a data breach, hackers could use your online accounts as a backdoor into your bank accounts, or other assets.

Note: do the businesses you work with have Cyber & Data Breach Liability coverage to respond to the damages you suffer in the event your personal data is compromised?  If not, you should be demanding it from them before you agree to do business with them.

Estate planning for your digital assets should be a crucial part of your overall planning strategy. These digital assets, which can hold both sentimental and monetary value, often go unaddressed in estate planning.

While it’s always best to consult with a financial planner and legal counsel when considering estate planning, there are some general guidelines everyone should follow when making plans for their digital assets.

Create an inventory

“Digital assets” can refer to a broad range of items, but in general, it refers to any part of your digital identity that would require your successors’ attention.

The first step in planning is to make sure that you have an exhaustive, centralized inventory of your assets so that your executor, attorney or trustee knows where to find everything.

1. Hardware

Begin by making an inventory of your hardware. It may seem obvious, but don’t take this step for granted.

Many people use a number of different devices in their day-to-day lives, with important data stored in each of those devices.

Remember to create an inventory and make a note of hardware that may be company-owned, and also remember that pieces of old hardware – computers, cellphones, cameras, etc. – may have important data on them.

Tailor your inventory to your needs, but consider some of the following:

  • Computers, laptops and tablets (including username and login information)
  • Cellphones
  • Digital cameras
  • CDs, DVDs, flash drives, SIM cards, external hard drives and other devices that store data

In addition to making a list of the names and locations of all of your hardware, it could be helpful to your successors to map out the file structures of your data.

Write out step-by-step instructions so your successors know how to navigate the file system on your hardware in order to access your important information.

2. Online assets

Next, consider your online presence in its various forms. Although it may be daunting, consider every site for which you’ve created a user profile and determine whether or not your successors will need to gain access.

In doing so, be sure to log website names, URLs, usernames and passwords.

The list will vary, but be especially mindful of websites that store your personal information or banking information. Consider the following:

  • Online backing accounts
  • Shopping sites (e.g., Amazon, the Apple Store, eBay)
  • Social media accounts (e.g., Facebook, Twitter, LinkedIn)
  • Cloud-hosted email accounts (e.g. Gmail, Yahoo, Outlook)
  • Cloud Storage (e.g., Dropbox, Google Drive)
  • Organizational sites and apps (e.g., OmniFocus, Evernote, Pinterest)
  • Subscriptions (e.g., Netflix, Audible, Hulu Plus, HBO Go)

 3. Work

Depending on your job, it might make sense to create a separate inventory for any work-related information that might be among your digital assets.

This will vary widely from profession to profession, but as telecommuting becomes more commonplace, it’s an increasingly important consideration.

In some cases, it’s a matter of keeping sensitive information secure. In other cases, it’s simply a matter of making sure your successors have access to the work you’ve been doing on projects that they might need to take over.

Consider the following:

  • Client or patient files
  • Spreadsheets
  • Online databases or software
  • Project tasks, notes or drafts

Everyone’s digital assets are bound to be different, which is why making an exhaustive inventory is so important.

Provide access to your assets

Once you have an inventory of your digital assets, it’s important to make sure to provide your successors with access.

You’ll want to choose someone you can trust to handle sensitive personal and financial information, as well as the task of carrying out your wishes. It could be a trusted advisor, an attorney or a family member or friend.

Whomever you choose, make sure you keep records naming that person and his or her responsibilities along with the rest of your estate planning information.

Just because someone has your hardware or knows your passwords, doesn’t mean that he or she is authorized to use them. State and federal laws may prohibit others from accessing or using your digital assets, so having proper documentation is essential.

Write out instructions

Once you’ve created an inventory of your assets and assigned the appropriate executor or trustee, you’ll want to document your wishes. It may seem tedious, but it’s important to take the time, and to be detailed. After all, you wouldn’t want someone mistakenly selling or deleting important documents or photographs.

Planning for the future

Estate planning may conjure unpleasant thoughts about death, but it’s important to plan now so that your wishes can be carried out, and your loved ones and colleagues can continue on without undue stress.

It’s also important to make sure you have the people and the resources that you need in order to make sure your wishes are carried out as you would like.

For further assistance, contact one of our Licensed Advisors and we can bring the professionals to the table needed to properly plan your estate.

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