Digital assets are an overlooked, yet increasingly crucial aspect of estate planning. Learn the common pitfalls and how to prevent them in your estate plan.
Digital assets are an often overlooked, yet increasingly crucial, aspect of estate planning. However, when most people think about assets and estate planning, they think of a file with important documents like a will and funeral plan stashed away in a filing cabinet. That may have been true in the past, but in 2021 all aspects of our lives are online, so it’s only natural that our assets have started to transfer into the digital space as well.
And when digital assets are ignored when planning your estate, the results can be heartbreaking. Too many families have had to resort to lengthy legal battles in an attempt to access important digital assets after their loved ones have passed away.
What are digital assets?
Digital assets are anything of monetary or sentimental value that exist online or in a digital format.
These can include:
Credit card or other loyalty rewards points
Cryptocurrencies like Bitcoin
NFTs (non-fungible tokens)
Email accounts
Digital photos, music or video files
Blogs or websites you own
E-books or audio books
Online payment accounts like Paypal
Social media accounts
Executors struggle to locate digital assets
One of the biggest problems executors run into with digital assets is there are no filing cabinets or boxes to search through. If you don’t write down and share where your digital assets are stored, there’s no way for your executor to know those assets exist, let alone how to access them.
For financial planners and advisors, they can only provide advice on the information they’re provided.
However, if you leave details about what digital assets you own and how to access them, it can make your executor’s job a lot easier. It also allows financial planners to have a more well rounded picture of their client’s estates and helps them provide comprehensive advice.
Platforms like EstateBox make it easy to keep everything safely in one place, eliminating the need for executors to go on a lengthy search and removing gaps for financial planners and advisors.
Legal battles with digital assets
Unfortunately, even if someone writes down their digital assets and how to access them, it can get messy. Carol Anne Noble of Toronto was in a four-year legal battle with Apple to access the account she shared with her late husband, Don. Despite being the executor and sole beneficiary of her husband's estate, she had been unable to access the account where he chronicled his experiences with a rare form of spinal cancer. Shortly after their story was published in a CBC article, Apple reached out to Noble and finalized a deal with her lawyer that allowed her access to her late husband’s account.
In the UK, Rachel Thompsom spent three years and thousands of pounds fighting to access her late husband Matt’s Apple account. Matt died without a will or instructions about how to access the thousands of family photos and hundreds of videos stored in his account.
What are companies doing to prevent these types of issues?
Luckily, these kinds of lawsuits are changing the landscape when it comes to digital assets like social media accounts and cloud-based storage services. Some companies have now started adding “legacy options” to their accounts and one can only assume that more will follow suit.
Facebook allows its users to add a legacy contact to manage their page after they pass away. Aside from managing the memorialized account, the legacy contact can also request the account be removed from the site. Google’s Inactive Account Manager allows its users to decide what happens to their data if their account goes unused for a set amount of time. Users can either select a trusted person to receive their data or have the data deleted.
Apple recently launched a legacy feature called Digital Legacy with it's iOS 15 update. The new feature allows users to add trusted contacts who can access their account after they’ve passed away. Trusted contacts will need to make a request before receiving access and will have a time limit set in place before the account is deleted.
Details like payment information will not be available for trusted contacts. The new feature should prevent costly legal battles for people trying to access their loved ones' photos and other files in their iCloud account after they’ve passed away.
Incorporating digital assets into your estate plan
It’s never too late to add digital assets to your estate plan. Here are a few steps you can take today to get started:
Record what your digital assets are and how your executor can access them. Using a secure platform like EstateBox ensures your information never gets lost or misplaced and makes it easy to keep up to date. It can also allow your financial planner or advisor to see the big picture of your estate and ensure you’re prepared for the future.
Use legacy contact features like Facebook, Google, and Apple currently offer. These features only help if users opt in.
Store your photos and videos in more than one place. If you store them in the cloud, have a backup copy on an external hard drive and make sure your loved ones know where to find it. This ensures they will have access to them after you die, even if they’re locked out of your cloud account.
Create your account today and enjoy a 60-day free trial (no credit card or code required) to help you get started on your life and legacy plan.
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While we’re passionate about all things estate planning, we’re not professionals. We recommend speaking with your lawyer or financial advisor when putting together an estate plan.
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