As technology has advanced, many aspects of our personal and financial lives have moved online, resulting in the accumulation of digital assets. Digital assets are a relatively new phenomenon. Nevertheless, they have become increasingly important components of both estate planning and administration efforts.
Understanding what digital assets are and how to manage them is important for comprehensive, effective estate planning. Whether you already have an estate plan in place or it’s time to create one, acknowledging both your digital footprint and your digital estate are going to be important undertakings as you move forward.
The basics
Digital assets are a form of property that is electronic in nature. A wide range of electronic records and digital property may be classified as digital assets, usually provided that individuals own and manage them online and/or on an electronic device. These assets can be categorized into several types, including these common classifications:
- Personal digital assets: Personal and professional email accounts, photos and videos stored on smartphones, computers and cloud services and social media accounts
- Financial digital assets: Access to online accounts at financial institutions, electronic currency and online payment accounts
- Business digital assets: Owned domains and websites, digital products, trademarks, patents and copyrights and accounts on digital storefronts
- Subscriptions and memberships: Digital subscriptions to various platforms and cloud storage accounts
Incorporating digital assets into estate planning is essential for several reasons. For example, without proper planning, loved ones may face difficulties accessing and managing digital assets. Digital assets can have significant financial value. Ensuring these assets are included in an estate plan helps preserve their value and facilitates their transfer to beneficiaries.
Even though addressing digital assets can take some effort, that effort is ultimately worth your time and energy.