Why You Need an Estate Plan for Digital Assets

In today’s increasingly digital world, our lives are intertwined with technology. We rely on smartphones, computers, social media platforms, and online accounts for various aspects of our personal and financial lives. However, many families underestimate the importance of including digital assets in their estate planning. In this blog post, we’ll explore why it’s crucial for middle-class individuals and families to have an estate plan that encompasses their digital assets.

What Are Digital Assets?
Digital assets include any online accounts, files, and virtual properties that hold value or sentimental importance. These can range from banking and investment accounts and digital currencies to social media profiles, digital photos, books, music and video collections, and even domain names or online businesses. Without proper estate planning, these assets may be lost or inaccessible, creating unnecessary difficulties for your loved ones during an already challenging time.

Preserving Your Digital Legacy
Your digital assets may hold significant sentimental value. Think about the memories captured in your photo and video collections or the personal messages and interactions on social media platforms. Including provisions in your estate plan for the transfer or preservation of these assets ensures that they are passed on according to your wishes and that future generations can access and enjoy them.

Protecting Your Financial Interests
Digital assets with financial implications, such as online banking, investment accounts, or cryptocurrency holdings, should be accounted for in your estate plan. More and more, we receive account statements online, bank online, and access our financial information from our computer or smartphone. By designating a trusted individual as your digital executor or including instructions for accessing and managing these assets, you can ensure their secure transfer and safeguard your family’s financial interests.

Ensuring Continuity of Online Businesses
If you own an online business, website, or blog that generates income, it’s vital to plan for its continuity after your passing. Consider detailing your wishes regarding the management or transfer of these digital enterprises in your estate plan. This will help your family navigate the legal and logistical aspects of the business and potentially maintain a valuable income source.

Addressing Digital Account Management
Many online platforms have their own policies regarding access to or closure of accounts after the user’s death. Read the end user agreements to see the full detail. By documenting your account information, usernames, and passwords in a secure manner, you can make it easier for your loved ones to navigate the complexities of digital account management. However, it’s important to consider the legal and security implications of sharing passwords, so consult with an experienced estate planning attorney to determine the best approach.

Legal Challenges and State Laws
While estate planning for digital assets is crucial, it’s essential to understand that laws governing digital assets can vary by state. Many states have yet to adopt any comprehensive legislation in this area. Michigan, in 2016, enacted legislation addressing fiduciary access to digital assets. You should make sure that your Michigan estate plan incorporates the guidance and protection of the legislation. To ensure that your digital assets are properly addressed in your estate plan, it is advisable to consult with an experienced estate planning attorney who can guide you through the legal complexities and ensure your plan aligns with the most up-to-date legal requirements.

Let Us Help
In today’s digital age, an estate plan that only covers traditional assets is incomplete. For families now, it is important to recognize the significance of digital assets and their impact on the well-being of your loved ones. Let us help you navigate the complexities of digital estate planning and secure your family’s future in this digital world.