You took the time to craft a comprehensive estate plan that details the distribution of your assets and provides financial security to your loved ones through trusts. Now, unfortunately, you realize you neglected to mention your numerous digital assets.
In recent years, the significance of digital assets has increased for nearly all individuals. The emergence of entertainment streaming services, cloud storage and online consumerism has shifted focus from large physical assets to digital properties. It is crucial that an estate plan reflects this change in focus.
What are some examples of common digital assets?
While some digital assets have a physical counterpart, not all do. These online properties can include:
- Entertainment collections such as movies, music, books and video games
- Online storefronts such as those hosted by Facebook Marketplace or eBay
- Websites including blogs, image- or video-sharing, and social networking
- Online finances including bank accounts, cryptocurrencies and fantasy sports accounts
It is crucial that your estate plan specifies digital assets such as these so they can either be distributed to heirs upon your death or decision-making authority transfers to a power of attorney should you become incapacitated.
What is power of attorney?
Power of authority (POA) generally refers to an individual named to make decisions regarding various elements in an estate plan. In the event of incapacitation, you will need someone to make financial decisions or medical decisions based on your stated wishes. Additionally, the POA can make decisions regarding your digital assets. For example, you might instruct the individual to include a specific message or photo on all your social media sites explaining the situation that prevents regular updates.
When you name a power of attorney for your digital assets, it is wise to include written authorization regarding access to secure accounts. Additionally, you can leave instructions on file storage, passwords and remote access.
Digital assets are an important part of your life. It is wise to take steps to ensure they are properly cared for if you are incapacitated by illness, injury or cognitive impairment.