Whether it’s through social media, online bank accounts, PayPal or email, today many people are storing their personal information and finances online. When an individual passes away, his or her online accounts will continue to remain active. For this reason, it is important to account for digital assets in an estate plan. By defining what assets an individual owns and how to access them, a person will ensure that their loved ones can access online accounts that may have sentimental, financial, or practical value. Additionally, making these accounts available to beneficiaries after death can prevent them from falling into the wrong hands, resulting in fraud or hacking.
What are digital assets?
In an estate plan, it is important that individuals define what digital assets they have. Digital assets may include, but are not limited to, the following:
- Social media – Facebook, Instagram, Twitter, LinkedIn, Pinterest, etc.
- Financial accounts – PayPal, bank accounts, eBay, Amazon, online bill pay
- Business accounts – consumer information, home and shipping addresses, credit card information, personal information, credit card statements, documents
- Blogs or domain names
- Loyalty program benefits – miles, points, cash back
- Online games
What will be done with each digital asset?
When drafting an estate plan, it is important that individuals state how to access each digital asset and how the asset is to be handled after he or she passes away. An individual may choose to have some accounts archived, while others they may want deleted entirely or transferred to family members, friends or business colleagues.
For digital assets that have financial value, an individual may consider whether or not they want to appoint someone to continue to manage the account, immediately close the account, or shut it down after the assets of the account have been distributed or sold. For example, if someone owns an eBay account through which they sell collectables, he or she may choose to transfer management of the account to another person, choose to have someone shut the account down after the collectables are all sold, or shut it down immediately. For miles, cash back and points, an individual may ask that those loyalty program benefits be redeemed. If a digital asset has the ability to continue to generate revenue after the owner passes away, he or she may want to consider where that money will go and who will have access to it.
Why is estate planning for digital assets important?
Estate planning for digital assets is important for a number of reasons, including making things easier on loved ones, preventing identity theft and fraud, and preventing unnecessary losses of the estate’s finances. Firstly, estate planning for digital assets may ease the burden off family members and loved ones who may need to access the accounts. Since many people set up a different login and password for each digital asset, identifying and accessing the accounts may be time-consuming and stressful. Loved ones will benefit from having this information provided to them as well as guidelines for how the accounts should be handled according to the deceased’s wishes.
Additionally, access to online accounts may be crucial in preventing the deceased’s identity from being stolen. Criminals may be able to open credit cards, get identification cards, and apply for jobs under the deceased’s names in the time before the authorities update their database with their death. Finally, access to the accounts may help keep track of the estate’s assets and ensure that unnecessary financial losses do not occur. Beneficiaries need to identify and access online bills, loans, insurance, and other expenses quickly or the accounts may accrue late fees or be canceled all together. This is especially important if the deceased ran a business as he or she may be the only person with access to servers, corporate bank accounts, employee payroll accounts, or incoming orders.
When creating an estate plan, it is important that individuals consult an experienced attorney who can oversee the process and help ensure that it reflects the wishes of the testator. The New Jersey estate planning lawyers at Hunziker, Jones, & Sweeney P.A. have experience representing clients in various matters, including the drafting, execution, probate, and contest of a Last Will and Testament. Our estate planning lawyers recognize that these issues can range from simple to complex, and come at an emotional time for family members and loved ones. The attorneys at the firm are trusted by their clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, contact our New Jersey estate planning law firm at (973) 256-0456.