An often-overlooked aspect of estate planning is your digital legacy. Deciding what happens to your digital assets when you pass away has become a crucial part of comprehensive estate planning.

According to a Pew Research Center survey in 2023, eight-in-ten or more U.S. adults say they use the internet, have a smartphone or subscribe to high-speed internet at home. Many rely on digital technology for socializing, work, and managing daily affairs, making it essential to include digital assets in your estate plan.

Including Digital Assets in Your Estate Plan 

When planning your estate, it’s important to consider digital assets alongside physical ones. Digital assets, like online accounts and files, can hold both financial and sentimental value.

Including them in your estate plan ensures your family can access important information, pass along valuable digital items, and preserve your legacy. Provide clear instructions on accessing accounts and passwords, and include a plan for transferring digital assets, just as you would for physical property.

What Are Digital Assets? 

Your digital assets consist of anything stored electronically that provides or has value, such as online accounts or e-files, that you own or control. These may include: 

• Passwords: Grant access to accounts like financial records or bill payments.
• Encryption Keys: Secure access to devices and data, crucial for preventing unauthorized entry.
• Email Accounts: Store important information, such as business communications.
• Social Media Accounts: May hold sentimental or monetary value through photos and memories.
• Digital Photos and Music: Can be passed down, like physical albums or records.
• Art: Creative works stored electronically may hold sentimental value or generate income.

Organizing Digital Assets 

To manage your digital assets, start by organizing them. Create an inventory of your digital items, such as accounts, subscriptions, and important files like photos.

Using a password manager can help securely store login details, passwords, and PINs, making it easier for your loved ones to access these assets when needed. Examples of password managers include LastPass, 1Password, and SecureSafe.

Writing Instructions for a Digital Executor 

In your will, appoint a digital executor to manage your digital assets. To keep your wishes private, provide separate written instructions, outlining:

• Devices and accounts
• How to access them (e.g., passwords)
• What should happen to each asset

Specify whether assets should be deleted or preserved and transferred to a beneficiary.

You can also designate legacy contacts for social media accounts in your written instructions. For example, Facebook allows legacy contacts to manage memorialized accounts, and Google lets users choose a trusted individual to access or delete their data after inactivity.

Benefits of Legacy Planning for Digital Assets 

Legacy planning for digital assets offers several benefits:

• Preserves valuable and sentimental digital property for your loved ones.
• Reduces the burden on your family by providing clear instructions.
• Protects your privacy by ensuring sensitive information is deleted.
• Guards against identity theft that could impact your family.

Although digital estate planning is a relatively novel concept, it makes sense to prepare your electronic legacy, given how prevalent technology has become. Making a digital estate plan is a crucial financial skill today. Consult with an estate planning attorney to learn more about making an electronic legacy plan.