In this digital age, it is important to consider your digital assets when planning for the future.
Digital assets have become an integral part of our lives. From social media accounts to online banking and cryptocurrency, digital assets are now an essential part of how we live and manage our affairs. However, despite their importance, many people do not take the necessary steps to plan for these assets in their estate plans.
The consequences of failing to account for digital assets in estate planning can be significant. Without proper planning, loved ones may not have access to important financial and personal information, resulting in potential financial difficulties or disputes among family members. Furthermore, cherished memories may be lost forever if proper measures are not taken to safeguard them. Different states also have varying laws regarding access to digital assets after death, making it essential to include specific provisions in your estate plan.
The first step in protecting your digital assets is to create a comprehensive inventory of all your digital accounts. This inventory should include a list of usernames and passwords, as well as any instructions for how to access these accounts. It is important to keep this inventory up to date and to ensure that it is accessible to the appropriate parties when necessary, such as your attorney, the person having your power of attorney or your executor.
Once you have created an inventory, you should work with an experienced estate planning attorney to create specific provisions in your estate plan to provide for your digital assets. These provisions may include granting specific individuals access to your digital accounts, transferring ownership of digital assets, or even making specific provision in your will to handle your digital assets after your death.
When planning for your digital assets, it is also important to consider the privacy implications of sharing access to your accounts. You should discuss with your attorney how to balance the need to provide access to your loved ones with your desire to maintain the confidentiality of your personal information, and whether this should be done only after your passing. It is also important to plan for the management of these assets if you become disabled, either temporarily or permanently.
Another important consideration when planning for your digital assets is the impact of tax laws. Digital assets, particularly cryptocurrency, can have significant value, and their transfer may trigger significant income tax issues. For this reason alone, it is important to plan for the tax implications of transferring these assets upon your passing.
In addition to planning for digital assets in your estate plan, it is also important to consider the ongoing management of these assets during your lifetime, particularly if you become unable to manage your accounts due to disability. For example, you may want to consider creating a digital vault to securely store important documents and information, or utilizing a password management system to ensure that your passwords are secure and up to date.
In conclusion, proper planning for your digital assets is essential in today’s digital age. Without proper measures, loved ones may face difficulties in accessing important information and memories, and valuable assets may be lost forever. By creating a comprehensive inventory and working with an experienced estate planning attorney, you can ensure that your digital assets are properly protected and that your wishes are carried out upon your disability and after your death. Remember, planning for the future is always a wise decision, and this includes planning for your digital legacy.
Nick Caridas, Attorney at CaridasLaw.com
Photo by Conny Schneider (choys-design.com)