This week I had the chance to sit down with Frank Campbell, Attorney and Partner of Holden & Campbell, and talk about why clients should plan for digital assets in their estates. Many people overlook this planning which includes all of your digital possessions, such as computers and smartphones, stored data (on your devices or in the cloud) and online accounts like Facebook and LinkedIn. Read on to learn more…
Frank Campbell, Attorney At Law
What exactly are “digital assets” and why should clients plan for them in their estates?
Many people who think they've completed their estate planning may have overlooked the proper management and orderly transfer of their digital assets after they die or become disabled. Digital estate planning includes all of your digital possessions, such as computers and smartphones, stored data (on your devices or in the cloud) and online accounts like Facebook and LinkedIn. You should include your digital assets in your estate plan. You should state who should get the data and if there are things you don't want others to have.
How does one begin to plan for digital assets?
First, conduct a digital fire drill. This will jog your memory about which digital assets you deem important. Consider the following questions:
- What valuable items would you lose if your PC or other device was lost or stolen?
- If you’re in an accident, would your family be able to access your significant digital information?
- If you died today, to what digital property would you like your loved ones to have access?
Next, make an inventory of the digital assets you named during the fire drill and include user names and passwords. Your digital inventory may include digital devices, data-storage devices or media, electronically stored data, social media accounts, domain names and intellectual property in electronic format. Keep this document safe.
Having a document with all of your accounts and passwords seems risky. How do clients keep this document safe?
You may want to create an electronic list of digital property and passwords and protect this file with strong encryption and a strong password and backed up in the cloud (not on your computer and smartphone). Create a master password for the electronic list, store the password in a safe deposit box or home safe and give your fiduciary instructions on accessing it.
There are also password storage apps that can handle the storage, encryption, and back up for you. I know Bay Point uses 1Password for this, which is great. Again you will need to store the master password somewhere such as a safe deposit box or home safe and give your fiduciary instructions on accessing it.
So besides making a list of data and passwords, is there anything else clients should do about digital assets in their estate plan?
You’ll also want to formally designate a digital executor so that someone will make sure that your digital assets are managed according to your wishes. You may need to provide this person with a special power or authorization to deal with certain digital assets, like cryptocurrency. Be sure that your will includes a list of specific digital assets and what you want your digital executor to do with them on your behalf.