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Introduction
Estate planning is a necessary task that everyone should undertake. It involves making plans for distributing one’s assets and belongings after death. However, in today’s digital age, traditional estate planning may not be enough. With the increasing role of technology in our lives, it has become important to include digital assets in our estate planning process. Digital assets refer to all the online accounts, files, and data that we own, and they hold a significant value in our lives. From financial accounts to sentimental possessions, our digital assets are an integral part of our estate and should be considered while making our estate plans.
The Rise of Digital Assets
With the internet becoming an essential part of our everyday lives, digital assets have become increasingly common. According to a survey conducted by McAfee, the average American owns digital assets worth over $55,000, and this number is expected to rise in the coming years. Digital assets can include anything from social media accounts, online financial accounts, digital photos and videos, music and movie collections, to domain names and even cryptocurrencies. These assets hold considerable monetary, sentimental, and personal value, and it has become essential to include them in our estate plans.
Failure to Include Digital Assets in Estate Plans
Unfortunately, many people fail to recognize the importance of including digital assets in their estate plans. According to a survey by the American Association of Retired Persons (AARP), only 28% of adults aged 18-44 have included provisions for digital assets in their estate plans. The main reason for this seems to be the lack of awareness about the significance of digital assets in our lives and how they can be passed onto our loved ones.
If digital assets are not included in our estate plans, they may be lost forever or end up in the wrong hands. Many online accounts have strict privacy policies that make it challenging for anyone else, including family members, to access them after the owner’s death. In such cases, valuable digital assets may remain inaccessible or even be deleted, causing considerable financial and emotional distress to our loved ones.
Including Digital Assets in Estate Planning
Estate planning in the digital age requires a comprehensive approach that includes both traditional assets and digital assets. Here are a few simple steps that can help ensure your digital assets are covered in your estate plans.
1. Make a List of Your Digital Assets: The first step towards including digital assets in your estate plan is to make a list of all your digital assets. This should include a detailed inventory of all your online accounts, login credentials, and passwords. It is essential to keep this list updated regularly to account for any new accounts or changes in login information.
2. Understand Terms of Service Agreements: Before adding any digital asset to your estate plan, it is crucial to understand the terms of service agreements. Some platforms may have specific policies for passing on account ownership after the owner’s death, while others may forbid it altogether. Knowing such policies can help you plan accordingly.
3. Choose a Digital Executor: Just like a traditional executor is responsible for carrying out your wishes after death, a digital executor is responsible for handling your digital assets. Choose someone you trust who is tech-savvy and can understand and follow your instructions for managing your digital assets.
4. Use Online Storage Services: We often use online storage services like Dropbox or Google Drive to store important files and documents. These services usually have an option to designate a beneficiary who can access the files in case of the owner’s death. This is an easy and secure way to pass on digital assets to our loved ones.
5. Update Estate Planning Documents: It is essential to update your estate planning documents regularly to include any changes in your digital assets. This will ensure that your digital assets are accounted for and distributed according to your wishes.
Conclusion
In conclusion, estate planning in the digital age is crucial to ensure that our digital assets are covered and distributed according to our wishes after death. It is essential to be aware of our digital assets and include them in our estate planning process. Failure to do so may result in the loss of valuable assets and create unnecessary problems for our loved ones. By following the steps mentioned above, we can ensure that our digital assets are included in our estate plans and pass them on to our loved ones as a part of our legacy.
