Digital estate planning is, in many respects, more complicated than traditional estate planning. Whereas finding and managing financial and hard assets after a loved one has died or become
incapacitated isn't always straightforward, identifying and gaining access to the digital assets of a loved one is apt to be an even more cumbersome process.
Our lives are ever more wired. We have devices, passwords, and bits of data coming to define us in ways both personal and financial. It would seem that there should be clearly defined legal steps to take for the management of our digital estates in the event of incapacity or death. Unfortunately, such legal steps are elusive, at best.
Since it would seem only logical (let alone practical) to make legal plans for the management and succession of our digital estates, what is one to do without a clearly defined body of law on the subject?
There is a patchwork of laws in some places, and some services have thought ahead to help those planning their estates. Nevertheless, the burden inevitably falls on the planners and their loved ones to really come to terms with those important digital assets, whether personal (a Facebook account) or downright valuable (a bank account or even a registered domain name).
The first step in planning your digital estate is to recognize the need. Thereafter, consider the following four step process outlined in a recent Morningstar article aptly titled “Do You Have a Plan for Your Digital 'Estate'?”:
- Do a fire drill: if you lose your electronic assets, or if someone takes them away,
or if a loved one can never lose them again (and so on and so forth), then what
is lost? What would I want a loved one to have access to?
- Take an inventory: list it out, [securely] document the passwords, and make your
heirs aware of your inventory.
- Back it up: create a backup of any digital assets you can, whether cloud based,
locally stored, or otherwise.
- Put your plan into writing: if it is not written down and available then it is not
a plan at all, but rather a hope, and all the more so with digital assets that
do not have common law precedents to guide your heirs.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Morningstar (October 3, 2013) “Do You Have a Plan for Your Digital 'Estate'?”