Digital assets and online accounts present unique, complex challenges. Digital assets include computer files, information stored on cell phones, emails, chat/instant messages, data in cloud applications, photos, airline miles, cryptocurrencies, internet domain names, sports books, music files and playlists, and many other items. There are also personal memories such as status updates, recipes, blogs, and the like. It is estimated that Americans have around $100,000 in digital assets and much more in irreplaceable, sentimental value, so it’s important to think about digital estate planning in 2023.

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In terms of your estate plans, these assets need to be both accounted for and organized. Important questions:

  1. Who do you want to receive your digital assets upon your passing?
  2. Which digital assets are private and should be destroyed upon your passing?
  3. How will your loved ones know to access these digital assets?

Bequeathing Digital Assets

Allison L. Kierman is the founder of Kierman Law.

If you want someone to inherit an asset that you hold digitally, you may want to specify what the asset is and who will get it. For example, your Trustee could copy all of your photos and distribute a copy to each of your children. Perhaps you want someone who has been unable to travel to inherit your airline miles. For small businesses, someone may want to take over the company and will need your Internet domain and website. For photographers, professional and otherwise, someone should receive your files and property. For music lovers, passing on a carefully curated playlist is meaningful. Whatever you have, someone may want it if you’re gone. 

Private Digital Assets

Some things on our phones in particular are extremely private. Perhaps there are photos or text exchanges that would be embarrassing if they were distributed to others upon your passing. Perhaps they have information you do not want your family or loved ones to know. If there’s a digital skeleton in your life, you should plan for how to handle it. Four out of five people believe privacy matters more than access to their accounts in the event of their death. For these people, their estate plans should specify that the executor is to destroy these accounts.

How to Organize Digital Property

When thinking about getting organized, you should consider two things: (1) getting organized in the event someone is caring for you because you are incapacitated; and (2) getting organized for someone to handle your affairs when you have passed. In most cases, the first example is both the most complicated and most necessary.

Much of our daily lives are done digitally today – banking and bill paying, online purchasing, healthcare videoconferences, and most all form of communication. If you are incapacitated, someone else, most obviously your Financial Power of Attorney, needs to know how to access your banking information, needs a list of bills you pay online or via check, and needs to understand all online account information. You should compile a list of what bills you pay and how you pay them (including the online account login and password). I recommend taking 30 days’ worth of mail and saving the first page of any bills; this will tell someone what service providers you use regularly and if payment is set up automatically or action is needed. You can store this information in hard copy or digitally. Careful of the catch-22 – someone must know where to find this information. You do not want to store a log of digital information digitally where no one can access it. 

In terms of getting organized for when you pass, this is also information that should be compiled. In this circumstance, the monthly bills are often less important than understanding where the financial accounts are. Who holds your retirement accounts and life insurance policies? Here, I recommend saving one set of statements. 

With regard to online accounts and social media, many companies and providers now have a legacy contact. For example, Facebook will allow you to name someone to obtain your login and stored information upon your passing. LastPass, a password storage app, will also allow you to grant Emergency Access to someone else. 

For all of your information, think of it like a trail of breadcrumbs. You need to put in the work to get organized and you need to tell a trusted contact that you have gotten organized and where they can find the information if needed. 

For digital assets, as with anything else, if it is important to you, it is important that you inventory the items and specify what will happen to them in your estate plans. 

Author: Allison Kierman is a Scottsdale estate planning and probate attorney. After practicing law in the Valley for more than a decade, Allison founded Kierman Law, to offer personalized service to her clients. Allison concentrates her practice on guiding families through the wills, trusts, and estate process and probate litigation. www.kiermanlaw.com