Estate planning is an important process that helps protect your assets and ensure your wishes are fulfilled and respected after you pass away. However, many people don't realize that in today's digital age, estate planning needs to include more than just physical assets.
Digital assets, such as online financial accounts, domain names, digital currency, and online content, can also have significant value and should be considered when creating an estate plan.
As a Colorado resident, it's essential to understand the importance of including digital assets in your estate plan and how to plan for them properly. This post will take you through things you need to know about managing digital assets when creating an estate plan so that you can feel secure knowing your plans have been taken care of in case something unexpected happens.
What Are Digital Assets?
A digital asset (electronic record) refers to virtually managed properties that are accessed and managed online. These assets may include:
1. Social media and email accounts
2. Digital currency
3. Domain name
4. Music and voice files, among other estate planning documents
In the state of Colorado, for instance, the Revised Uniform Fiduciary Access to Digital Assets Act allows a fiduciary acting under a will or power of attorney, a personal representative, conservator, or trustee to gain access to the digital assets of a person who has passed on or become incapacitated, where appropriate. Such laws help safeguard one's rights by ensuring that valuable digital assets are properly managed and secured, even in incapacity or death.
What Things You Should Consider When Creating Estate Plan For Digital Assets:
Creating an estate plan that includes digital assets is becoming increasingly critical in today's digital age. Here are some of the most important factors you should consider when creating an estate plan for digital assets:
1. Identify all of your digital assets:
This includes things like bank accounts or other financial online accounts, social media accounts, email accounts, online marketplaces, and digital currency. Make a list of all of your login information, including usernames and passwords, and store it in a secure location.
2. Appoint a digital executor:
Just like you would appoint physical executors (estate planning attorneys) to handle your physical assets, you should also appoint a digital executor to handle your digital assets. This person will be responsible for managing and distributing his or her estate, including passwords, accounts, and digital files.
3. Include digital assets in your will:
It's important to include digital assets in your will so that your family members and legacy contact can access them after you pass away. Additionally, make sure to provide instructions on how these digital assets should be managed and distributed.
4. Update your estate plan regularly:
As technology and your digital assets evolve, it's important to update your estate plan regularly. Make sure that all passwords and login information is up-to-date and that any new digital assets are included in the estate plan because they may have significant value in the future.
5. Consider online relationships:
Don't forget about online relationships that may have real-world value, such as a domain name, a social media page with a large following, or a valuable email list. These digital assets can also have significant value and should be considered when creating an estate plan.
6. Be mindful of privacy:
Keep in mind that your digital assets may contain sensitive information, so it's important to have a plan in place to keep them private because they are just as valuable as your tangible assets.
Estate planning for digital assets may seem overwhelming, but it's important to remember that it's a process, and it doesn't have to be done all at once. By taking the time to understand the importance of including digital assets in your estate plan and following the steps above, you can ensure that your digital assets are protected and distributed according to your wishes.
And if you're worried about your kids fighting over your Spotify account, well, that's just an added bonus! Consulting an estate planning attorney can be a valuable step in ensuring that your digital assets are properly included in your estate plan. If you're a Colorado resident, consulting a local attorney that is familiar with Colorado state laws is particularly important.
Overall, working with an attorney to include digital assets in your estate plan can provide peace of mind and ensure that your wishes are carried out in the event of your passing.
Should I include digital assets in my will?
Yes, it is important to include digital assets in your estate plan, including online accounts, digital currencies, and electronic files. Failure to include these assets in your estate plan can lead to complications, including the potential loss of access or unauthorized access to your accounts. It may cause difficulties for your loved ones trying to settle your affairs.
To ensure that your digital assets are properly addressed in your estate plan, consult an experienced estate planning attorney who can help you identify and catalog your digital assets and develop a plan for their distribution or management after your passing.
What is the Revised Uniform Fiduciary Access to Digital Assets Act?
The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) is a law in Colorado that deals with the management of digital assets after an individual's death.
It defines digital assets as electronic records that an individual has a right or interest in and outlines procedures for authorized access to these assets under various legal situations.
The RUFADAA Colorado law is necessary to keep up with the changing digital landscape, and its broad definition of digital assets allows for flexibility in managing these assets.
How can you protect your digital assets?
To protect your digital assets, start by taking inventory of all your digital accounts and providing information on how to access them. This can be done through a written list of access codes and passwords or a password app. Make sure to update and share this information regularly with loved ones. Finally, consult with an estate planning professional to address any legal issues and ensure that your digital assets are protected in your estate plan.