The modern world has turned many old estate planning theories upside down. The digitally-enabled world has many new assets that are available online. You are most likely the owner of a veritable trove of digital assets that you don’t even think of as assets. There are websites, domain names, e-photos, social media accounts, and even blogs. These are capable of being memories or even translate to income.
How Are digital Assets Important To Estate Planning
The internet age has made all records electronic. The age of paper records is slowly diminishing and there are now all statements of storage of financial dealings on the computer. The eco-friendly paperless ethic is permeating many homes in the USA. Even most of the information is often stored electronically. The same is password protected and that makes access difficult unless it is passed on as a part of the estate.
Financial transactions are increasingly online and are stored on the cloud or on emails. Accounting for all your online passwords and data is equivalent to assets. It is a legal property like any other asset and has to be passed on to an heir by lawful means. The law pertaining to digital assets is still in the nascent stages and evolves fast. The passwords and encrypted data is information that is securely encoded and can block access to assets at the time of probate.
Obstacles Faced When Distributing Digital Assets While Estate Planning
There is vital information that can present obstacles to heirs trying to access the property and financial records of a person after death.
Many a time family members are unaware of your passwords for laptops, smartphones and such. If you die unexpectedly without anyone having access to your passwords to your documents it will be a huge problem. Some passwords may be easy to crack and some might be difficult. Some will be impossible due to their security encryption. This may block access to many documents and transactions stored online. If your business is a part of your estate planning, it might be impossible to reach your emails and trade might suffer.
Data Privacy Laws
Federal data privacy laws may be in place keeping your access to sensitive data limited. Service providers also do not have permission to share sensitive data with the legal heirs. Companies like Facebook and Google may close down on your accounts. This may mean losses if you are using these platforms to conduct business. There might be photos and media that have sentimental value that may be denied to your loved ones. Legal means may be costly and time prohibitive.
Encryption of data may cause your heirs a whole lot of worry. The encryption system adds an extra layer of security to all your data. That makes it impossible to crack the password. This may lead to losing large amounts of data. Encryption leads to the scrambling of data. It is always advisable that a family member or a trusted friend should be aware of your passcode.
How To access Digital Data When Estate Planning
There is a simple way to bypass all the issues that pertain to data inaccessibility after your death. Just add the items that are in the domain of the internet to your estate plan.
- Make a comprehensive list of the digital assets you have. This may include passwords for Paypal accounts, e-wallets, emails, social media accounts and any virtual currency that you may be holding. Make the password known to a trusted family member. You can also use tools that can help you manage passwords to make it easier.
- You can also make a digital locker where you save all your important documents. Store any documents you have on the cloud in a backup computer or an external storage device to keep them safe,
- The most important step is to provide legal assurance and consent in your will that your heirs can access your digital space. You can assign one person access and allow the distribution of your digital property through the agent.
Digital assets are very new to the estate planning world. Not every traditional lawyer would know how to handle such assets. Do remember to talk to a professional estate planner to help you frame the will or trust with care. You can keep adding newer technology to keep your assets safe. Just remember to make it a part of your estate. This will allow your family to enjoy all the fruits of your labor.