The digital age presents unique estate planning challenges. Traditionally, trusts handled tangible assets like real estate, stocks, and personal property. Now, a significant portion of our lives, and assets, exist online – from financial accounts to social media profiles. Including these “digital assets” in your trust requires careful consideration and planning. Approximately 73% of adults have at least one online account they would like someone else to be able to access after their death or incapacitation (Source: Statista, 2023). Simply listing “all online accounts” isn’t sufficient; you need a clear, legally sound method for granting access without compromising security during your lifetime.
What exactly are considered “digital assets”?
Digital assets encompass a wide range of items. This includes online banking and investment accounts, email accounts, social media profiles, digital photos, cryptocurrency holdings, and even reward points or online subscriptions. The legal definition is still evolving, but broadly, it refers to anything that exists in a digital format and has economic or sentimental value. A crucial aspect is determining the level of access granted. Do you want your trustee to simply close accounts, or to actively manage them? This needs to be clearly defined in your trust document. “Digital assets are often overlooked in estate planning, but they can represent a substantial portion of a person’s wealth and legacy” – Estate Planning Journal.
Can my trustee simply access my accounts?
No, unfortunately, it’s rarely that simple. Most online service providers have terms of service that prohibit access to accounts by anyone other than the account holder. Attempting to circumvent these terms could lead to legal issues or account closure. The Stored Communications Act, a federal law, also impacts access to digital information. Therefore, directly providing passwords in your trust document is generally *not* recommended. Instead, a more sophisticated approach is needed, such as utilizing a digital asset management platform or a “digital executor” designation. Many states are enacting laws to address digital asset access, but the landscape is still developing.
What is a digital asset management platform?
These platforms act as a secure repository for your digital account information and access instructions. You can store usernames, passwords, security questions, and specific instructions for each account. Critically, these platforms often allow you to grant access to your designated trustee or executor *after* your death or incapacitation, often triggered by a verification process. They provide an audit trail, enhancing security and accountability. Some platforms also offer features like automatic password updates and security alerts. One prominent benefit is the ability to update your information seamlessly as accounts and passwords change. They bridge the gap between traditional estate planning and the digital world.
What happens if I don’t plan for my digital assets?
I remember a client, Mr. Henderson, a retired software engineer, who meticulously planned his estate but neglected his digital life. He had a beautifully crafted trust, but his family couldn’t access his online investment accounts, which held a significant portion of his retirement savings. Weeks turned into months as they navigated legal hurdles and contacted various financial institutions. The delays caused considerable stress and financial hardship for his widow. The entire situation could have been easily avoided with a simple digital asset plan. The lack of foresight created unnecessary complications and emotional distress for his loved ones.
What about social media accounts – do I need to include those?
Absolutely. While seemingly less valuable financially, social media accounts often hold immense sentimental value. Photos, videos, and memories shared online can be cherished by family and friends. You can instruct your trustee to close accounts, memorialize them (some platforms offer this feature), or even manage them to continue sharing content. Specifying your wishes in your trust prevents family disputes and ensures your digital legacy is preserved as you intend. It’s about more than just deleting profiles; it’s about honoring your online presence and preserving memories for future generations.
How can I ensure my plan is legally sound and secure?
Working with an estate planning attorney experienced in digital asset planning is crucial. They can help you draft appropriate language for your trust, select a secure digital asset management platform, and ensure your plan complies with applicable laws. The attorney can also advise you on the best way to store your access information and protect it from unauthorized access. They’ll help you avoid common pitfalls and ensure your digital assets are managed efficiently and legally. Consider a multi-factor authentication approach for added security, and regularly review and update your plan to reflect changes in your accounts and passwords.
How did a client successfully manage their digital estate?
Mrs. Alvarez, a savvy entrepreneur, came to me concerned about her extensive online business and digital assets. We implemented a comprehensive digital estate plan that included a digital asset management platform, clear instructions in her trust, and a designated “digital executor” – her tech-savvy daughter. After she passed away peacefully, her daughter seamlessly accessed and managed her online accounts, ensuring the continuation of her business and preserving her digital legacy. The process was smooth, efficient, and provided immense comfort to her family. They were grateful for the foresight and planning that had alleviated stress during a difficult time. The digital executor, equipped with the necessary access and instructions, was able to honor her mother’s wishes and protect her digital legacy.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
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Feel free to ask Attorney Steve Bliss about: “Can I write my own trust?” or “How do I get appointed as an administrator if there is no will?” and even “What does it mean to “fund” a trust?” Or any other related questions that you may have about Trusts or my trust law practice.