What Are Digital Assets in Estate Planning?

February 6, 2024
Our Media Estate Lawyers at Eckell Sparks Help Clients With Digital Asset Estate Planning

More than ever, our lives are intricately woven into technology and the internet. One’s digital assets can be significant, from online financial records to stored passwords. Our legal team stresses the importance of incorporating digital assets into estate planning, and here is why.

Common Categories of Digital Assets

Digital assets include various electronic records and files stored online, on computers and mobile devices. Usernames and passwords (encrypted keys) are needed to access the information.

You may have some, more, or all of these stored online or on the cloud:

  • Any personal information you have stored, including photos 
  • Cell phone apps 
  • E-commerce accounts like Amazon
  • Email
  • Online accounts for utilities and mortgage payments
  • Online banking accounts
  • Online subscription accounts 
  • Social media accounts

Certain assets, like electronic bank account statements, might be considered digital assets, but the actual funds are not. As for cryptocurrency, the account access platform is a digital asset, but the actual asset itself (Bitcoin, etc.) would be subject to other laws.

How Do I Account for My Digital Assets in an Estate Plan?

You might think sharing your passwords with your executor, fiduciary, or heirs is the right solution for estate planning, but there are possible pitfalls. Doing so could weaken your personal security, and digital assets are often subject to service agreements and state and federal laws. That means that other parties will need your permission to access those accounts.

Since digital assets can contain highly personal information, you might want to grant access only to certain people. Depending on how many you have, this process can be overwhelming.

Take Inventory of Digital Assets and Passwords

You should thoroughly take inventory of your digital assets; including things you might consider unimportant, like gaming accounts, is essential. It is best to have a separate inventory of usernames and passwords in a password-protected document. If you are uncomfortable with that, write them down and keep the list safe or with your attorney. Remember that people update accounts, usernames, and passwords often, so it is vital to keep the list updated.

What Happens if I Do Not Include My Digital Assets in My Estate Plan?

Excluding digital assets from an estate plan can complicate things significantly for beneficiaries. Not only will they be unable to access the assets, but they might not even know which ones exist. Imagine your child never accessing the money in your largest investment account. In some cases, computer forensics experts can locate and get the information.

Our Media Estate Lawyers at Eckell Sparks Help Clients With Digital Asset Estate Planning

Nowadays, including digital assets in an estate plan is essential. For more information, contact Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. Our knowledgeable Media estate lawyers will help you put a plan in place. Call 610-565-3701 or complete our online form today. Located in Media and West Chester, Pennsylvania, we serve clients in Delaware County, Chester County, and Montgomery County.