Updated: May 22
You may have arranged for your loved ones to inherit your home, the Picasso, your great-aunt’s 100-year-old gold ring, or other family treasures, but since the introduction of cryptocurrency in 2008 coinciding with the birth of social media, a whole new world of assets has become of great significance: digital assets. Along with cryptocurrency and social media came more digital security. This can become quite problematic for those who either use social media and/or invest in cryptocurrency (think Bitcoin) when it comes time to pass those investments on. This is where building your digital legacy begins.
But let’s rewind…
What exactly are “digital assets”?
There is often confusion surrounding the idea of digital assets and cryptocurrency as they are relatively new ideas. Think of it this way: Cryptocurrency is a type of digital asset, but a digital asset is not necessarily cryptocurrency. Most people now-a-days have some sort of digital assets since it has become the norm to store and conduct financial business in cell phones, laptops, PCs, and the cloud.
The definition of digital assets is always expanding so just remember ANY content, in any format, that is stored online or digitally and provides “value” to you and/or your business can be considered a digital asset. The following list is not exhaustive so check with your estate planning attorney for a more refined list dedicated to your particular case.
Here is a quick run-down of some digital assets you may have:
Þ Personal and business email accounts
Þ Social media (Instagram, Facebook, LinkedIn, WhatsApp, etc.)
Þ Online financial accounts and apps
Þ Cloud accounts and information
Þ Cryptocurrencies, such as Bitcoin, Dogecoin, and Tether
Þ Non-fungible tokens (NFTs)
Þ Personal and business websites
Þ Digital files, photos, and videos
Þ Digital rights and access to literary, musical composition, motion picture, or theatrical works
Þ Online blog content
Þ Online video channels especially where the content is monetized.
Accessing your digital assets properly may not be easy or even possible for your beneficiaries if your estate plan doesn't catalog your digital assets accurately. Think of it: precious family pictures, files and videos, and personal social media accounts could be lost forever, and your family may not receive all the wealth you would like to leave them. If you own a business or cryptocurrency, it gets even more problematic.
However, there are steps you can take that will help you begin to protect, organize, and take control of your digital assets and build your digital legacy:
Make a master list of all digitally stored content and property so your family/heirs know what you have and where they can find it:
Include passwords, online accounts (including email and social media accounts) and digital property (including website names, cryptocurrency, and money transfer apps). Put your list in a safe location and make sure your beneficiaries know how to access it.
* Tip: FYI: Inexpensive password management apps such as LastPass can help simplify this effort.
Back up data stored in the cloud: If you store any digital assets in a cloud (iCloud, Google Drive, Microsoft OneDrive, etc.) back them up to a computer or storage device such as an external hard drive (They start at around $50 for 2 TB). Back up your storage device consistently so that family members and heirs can access them in the future with fewer complications.
Appoint an executor who is tech-savvy:
When you create your estate plan choose an executor or fiduciary that is familiar with technology and won’t have issues retrieving your cryptocurrency and/or other digital assets. It is possible to have co-executors in which one might take responsibility for your digital assets, specifically. Consult with an estate planning attorney for more detailed information.
·When working with an estate planning attorney:
Update your estate plan (wills, powers of attorney, and any trusts) language to include giving lawful consent for providers to disclose the contents of your electronic communications to the people of your choosing.
Reminder: When your attorney drafts your estate planning documents, clearly document them to allow your fiduciaries to bypass, reset, or recover your passwords.
Remember digital assets are still a relatively new phenomenon, so the laws that address them are changing all the time. When you connect with your attorney talk about the steps you can take now and check in regularly to update your estate plan to accommodate any changes in the law or in your digital property.
Stay tuned to Your Digital Legacy part II. I will be covering social media more closely and will provide tips on how to begin your own social media digital legacy.