When most people hear the word “assets”, they think of cash, stocks, bonds, real estate and other forms of investments. However, there is another category of assets which is often overlooked: digital assets.
A digital asset is anything that is stored in a digital file. It also includes digitally-stored content in an online account. This includes email accounts, smartphones, tablets, computers, social media accounts, web pages, blogs and domain names. Important information about bank and brokerage accounts, expenses, insurance and debts are stored digitally on the client’s computer, smartphone or email account. If the client’s digital files can’t be accessed promptly, bills may go unpaid and certain assets may be overlooked. Digital assets ignored or forgotten are also at high risk for online theft or abuse.
Artwork, web pages, graphics, videos, writings and photographs are digital assets that can have significant monetary value. Email and social media accounts often have significant sentimental value that may be very important to the family and friends of a decedent.
It is difficult to assign a true dollar value to digital assets, as their value is a combination of true dollars and cents as well as sentimental value, but in 2013, McAfee estimated that on average globally, technology users had about $35,000 of digital assets stored on personal devices. For Americans, that number was higher – more than $55,000.
According to AARP, one in three caregivers say that their top challenge is locating passwords and important account information connected to a loved one’s digital assets, and 49 percent of people find that they do not have the legal authorization required to obtain the needed information.
With proper planning, you can protect your digital assets in the event of your disability or death.
The first step is to create an inventory of digital assets. Whether written on a piece of paper or created via computer spreadsheet, include all pertinent information and keep information in a safe place.
The next step is to decide how you wish to preserve and transfer your digital assets. There are a number of online storage options – such as DropBox or Google Drive – that offer services to allow users to store digital assets, as well as information about digital assets, for a monthly or annual fee. In addition, a password manager system such as LastPass can help you easily manage the passwords to your many digital assets by using a master password system and encryption technology. These services will allow a designated person to access an owner’s digital assets upon death or disability.
The third step is to notify a fiduciary in writing that the account exists.
Finally, always review and update your inventory of digital assets at least once a year.
Careful planning and thorough documentation can go a long way toward protecting your identity, managing your accounts and preserving your digital items of sentimental value. Managing your digital legacy is something that should not be left to chance. With a few simple steps, you can ensure that your digital assets are protected.
Not to be construed as legal advice. Please consult with a qualified legal and/or tax professional.