To understand what digital assets you might have and how important they are to you, think about an average day in your life.
Do you:
- Use email?
- Have a social media presence on sites such as Facebook, LinkedIn, or Pinterest?
- Utilize a digital calendar?
- Have a Google account?
- Backup your computer files, music, videos, and photos on a cloud based storage service like Google Drive, Dropbox, or Box?
- Conduct your banking or maintain your investments online or through an app?
- Manage your family or business on a web-based service like Mint.com or QuickBooks?
- Pay your bills online?
- Have an Apple, Amazon, or other account which stores purchased data?
If you do any of the above, then you will have “digital assets.” What is more, is that these digital assets can accumulate rather quickly. For perspective, just try to make a list of all the online accounts you ever opened for any purpose in the past ten years. Even more importantly, these digital assets have value.
One McAfee study estimates that the average Internet user has over $37,000 in digital assets. If you had $37,000 in cash, wouldn’t you put measures in place to protect that money? Your digital assets should be no different, and that is why they need to be included in the estate planning process.
But protecting the financial value of your digital assets is just one reason to include them in your estate planning.
Another important reason is to avoid leaving a mess for your loved ones. If something happens to you, would your closest friends and family be able to locate and access all of your online accounts? Would they know the usernames and passwords for all of your social media accounts, emails, and bank accounts?
In addition, how will your bills get paid if you become incapacitated? Since many people now receive their bills electronically, it would be incredibly helpful for your family or fiduciaries to access these online accounts to pay outstanding debts. In some situations it would be imperative in order to care for you and your family properly.
From a sentimental perspective, your family might want to have access to photos of you that are stored on Facebook or Flickr or in a cloud storage service, as well as messages you sent them through email. Such digital mementos are very valuable to loved ones, and can help your legacy be carried on to future generations.
As you might be starting to see, if you fail to include your digital assets in your estate planning, your family could be denied access to your online accounts and content, or may not even know you owned certain digital assets. Additionally, most electronic service providers like Facebook and Gmail have Terms of Service and/or a Privacy Policy stating that they will not give out login credentials or provide access to another person’s account and/or its content. This makes it even more important to protect and do estate planning with your digital assets.
