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What is a digital estate plan?

On Behalf of | Dec 11, 2023 | Estate Planning

The lives of most American adults are increasingly intertwined with digital technology. As a result, the concept of a digital estate plan has become consequential in ways that few could predict even a few decades ago. 

A digital estate plan can help to ensure that your online assets are managed according to your wishes after you pass away or become incapacitated. This relatively new aspect of estate planning addresses a range of digital possessions – from online bank accounts to social media profiles.

Understanding digital assets and why they need to be protected

Digital assets encompass anything that exists in a digital format and comes with the right to use. This includes digital files like photos, videos and documents, as well as online accounts such as email, social media, online banking and cryptocurrency wallets. These assets can have significant financial or sentimental value, making their management a key concern in estate planning.

The primary reason for a digital estate plan is to provide clear instructions on how your digital assets should be handled if you’re incapacitated or if you pass away. Without such a plan, family members might struggle to access important digital files or online accounts, leading to the potential loss of valuable or sentimental digital property. 

Key components of a digital estate plan include:

  • An inventory of digital assets: Compile a list of all digital assets, including login credentials. This inventory should be kept secure but accessible to your designated executor.
  • Instructions for each asset: Specify what should be done with each asset – whether it should be saved, deleted or transferred to someone else.
  • Designation of a digital executor: Appoint someone you trust to execute your digital estate plan. This person should be tech-savvy and understand the importance of managing digital assets.

As your digital footprint continues to grow, the importance of having a digital estate plan in place becomes increasingly apparent. It is a thoughtful and necessary step to better ensure a comprehensive and effective management of your digital legacy.