We don’t want to end National Estate Planning Awareness month without addressing the popular and often misunderstood topic of a Digital Estate. What exactly is a Digital Estate? What does it mean, and how can you protect yours?
We live in an increasingly digital world.
Technology is ingrained in our day-to-day lives, so much so that maintaining personal and financial information on the internet is routine. Any type of electronic information that can be stored on a device (such as a computer, tablet, or phone), online, or in the cloud is considered a “digital asset.” Unlike the traditional “asset,” digital assets may or may not have financial value.
All your digital property comprises what is known as your digital estate.
Digital property can be broken down into three main categories:
- Personal digital property – this includes any online accounts, such as email accounts, social media accounts, shopping accounts, photo, and video sharing accounts.
- Personal digital property with monetary value – this includes accounts that are used to manage money and may hold money or credits, like PayPal, bank accounts, loyalty rewards programs, and any accounts with credit balances in your favor.
- Digital business property refers to digital property owned by a business organization. This could include assets of an online store you manage, such as your own online store or an eBay, Etsy, or Amazon store through which you sell things.
It is common for people—even those who should know better—to underestimate the value and scope of their digital footprints. Amazingly, the average American consumer has between 90-210 online accounts with usernames and passwords…that’s a lot to manage!
Planning for your Digital Estate
The fact is, settling your estate could become complicated for your loved ones if you haven’t adequately identified or accounted for your digital assets—especially should those assets become lost or inaccessible. However, it is possible to help alleviate the administrative burden and potentially prevent significant financial and personal loss for your loved ones with a well-drafted estate plan that includes the management and distribution of digital assets.
Access is critical
To pay your bills, copy photos you have on your computer or phone, and handle all your other affairs, someone will need access to the log-in information for a variety of accounts. Ideally, at least two people—not necessarily in the same household—should have access, just in case. Make sure these passwords are kept updated and are shared. Your family must know where to find them. A password manager often comes in handy.
Recently we offered a webinar explaining how to inventory your digital assets, manage your digital estate, and preserve your digital legacy against identity theft. “Estate Planning for a Digital World: How to Protect Your Traditional Assets While Safeguarding Your Digital Assets” is available for free on-demand on our website.
As always, we invite you to contact Hurley Elder Care Law if you have any questions about Estate Planning in a digital world.
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