Digital Assets Upon Death in your Topeka Estate Planning
Your estate comprises many things: your home and its contents, retirement accounts, life insurance policies, vehicles, checking and savings accounts, and investments.
But many of us don’t consider the value of our digital assets. Think about everything you do, have, and save on your computer, your smart phone, or your tablet.
It could be anything from pictures from your vacation to email and social media accounts. It can also involve electronic financial transactions or blog content. If it’s important to you, it’s important enough to be in your estate plan.
Understanding the importance of digital assets as part of your estate plan
Digital assets include any number of password-protected items that may be inaccessible upon death. The last thing you want is for family photos to be lost forever or for your heirs to be unable to find critical financial information.
More than ever before, being smart about estate planning means being savvy about your digital assets.
What used to be committed to paper is now more likely to be on the Internet and in the cloud. Digital assets are a relatively new—and ultimately vital—part of your estate plan when you create a new plan or revisit and revise an existing one.
Are digital assets part of your Kansas estate?
To find out, make an inventory of everything you own, do, and keep online. Typically, it can be broken down into four categories:
- Personal/sentimental digital assets:
- Digital photos and videos of family, friends, vacations, and memorable life events such as weddings or graduations
- Documents you may have scanned and saved online, including historical family documents (old birth, death, or military records)
- Personal email and correspondence
- Genomic/DNA/Ancestry accounts (23andMe, Ancestry.com, etc.)
- Financial digital assets:
- Bank accounts
- Retirement accounts (401k, Roth IRA, pensions)
- Credit card rewards
- Electronic gift certificates
- Investments (stocks, etc.)
- Lawsuit settlements and/or structured settlements
- Virtual currencies such as bitcoin
- Online gaming accounts
- Social media digital assets:
- Facebook, Instagram, LinkedIn, YouTube
- Message board accounts
- Business digital assets:
- Online marketplace accounts such as eBay or Etsy
- Website domains
- Income-generating videos, blogs, or photographs
- Digital intellectual property (patents, trademarks, copyrights)
- Software licenses
How do you incorporate digital assets into your estate planning?
The Kansas legislature defines a digital asset as “an electronic record in which an individual has a right or interest, but it would not include an underlying asset or liability unless the asset or liability is itself an electronic record.”
Incorporating those assets in which one has a right or interest starts with deciding how you want to deal with them into your plan, much as you would any other asset.
Once you have inventoried the digital assets that, upon death, you wish to distribute to your heirs, you can discuss with your attorney the way you want them handled. You may choose to put them in trust, to be managed by your appointed fiduciary.
You may choose to grant power of attorney to the person who would make decisions should you become incapacitated. If you choose to put them in your general estate, distribution is then handled by your personal representative (executor).
No matter what you decide, be as specific as possible as to how you want these assets, both large and small, handled.
Don’t forget to make your passwords part of your digital estate plan
All the preparation in the world will be of little help if you don’t include your username, password, or PIN in your estate plan, and make sure that they are updated as necessary.
If you are comfortable doing so, make a list of all your password-protected online emails, accounts, and social media so your loved ones can access your digital assets upon death. Make sure you include instructions for two-factor authentications that might be required.
Under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), Kansas law gives you the option to appoint a digital assets fiduciary in your will planning process.
Whether that fiduciary is a person granted power of attorney, is a personal representative, a trustee, or acting as a guardian or conservator, he or she is charged with “managing tangible property that applies to the management of digital assets. This is including the duties of care, loyalty, and confidentiality, and describes the scope of a fiduciary or designated recipient’s authority over a user’s digital assets.”
If you choose to do so, you can utilize a password manager service. In addition to getting an extra level of security by defending against hackers, you only need one password to unlock the “vault” where your login information is stored.
You can safeguard your digital footprint while also ensuring that your trusted fiduciary and/or your loved ones can more easily access your online assets.
It’s vital that you include digital assets upon death in your estate plan. They may be worth more than you know and may be of both emotional and monetary value to your beneficiaries.
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