A Practical Guide to Organizing Your Digital Estate


A Practical Guide to Organizing Your Digital Estate


You may have already invested a lot of time and energy making sure your assets, finances, and estate plans are in order. But what about your digital estate? 

Your digital estate consists of the accounts, files, and data that you own when you die, much like your physical possessions consist of the houses, cars, and furniture that you leave behind when you die. In today's digital world, failing to plan ahead for your digital estate makes it difficult, or even impossible, for your loved ones to find and access your online life. This guide gives you the information and resources you need to protect your legacy against digital pitfalls.

What is a digital estate?

A digital estate is comprised of all of your online assets and accounts, any digital assets you may own, and any digital devices like a computer or cell phone. Like a traditional estate, it’s important to ensure that all these items are organized for your family in case something happens to you. However, digital estates are updated regularly -- every time you add a new account, buy a new device or even change a password. Because there's usually not a physical record of your online accounts, digital assets are invisible or inaccessible if something happens to you. Having a detailed plan in place beforehand will alleviate concerns that your loved ones may face in such an event.

What makes up your digital estate?

Your digital estate is made up of more elements than most people realize! Items included in your digital estate include:

  • Online accounts
  • Digital photos, videos, other media
  • Digital books and movies
  • Digital files (e.g., Dropbox, Drive files)
  • Social media posts
  • Domain names
  • Websites you own
  • Digital account statements (e-statements)
  • Digital devices (computer, cell phone, etc.)
  • Credit Card Points
  • Airline Miles
  • Online financial accounts (e.g., Venmo, Paypal)
  • Cryptocurrency
  • Non-Fungible Tokens (NFTs)
  • Video Game Assets

People usually underestimate the value of their digital estate - the average household now has over $55,000 in digital assets, and as cryptocurrency becomes mainstream, that number is increasing rapidly. Even video game assets can go for a surprisingly high amount -- the top sale was $6 million dollars for a single item!

How to organize your digital estate for yourself & your loved ones

The average American now has upwards of 150 online accounts, each with a username and password. Being able to use Face ID and fingerprints to open accounts offers a false sense of security, making it easy to forget that your face and fingerprints may not always be there to access your accounts. That’s why it’s so important to have a plan for your digital estate, including an inventory of what accounts you have, where they are, how to access them, and what you want done with them. 

Keep in mind that your will becomes public record, so you'll want your detailed inventory to be in a separate tool or memorandum that can remain private. You'll need to ensure that your inventory stays up-to-date, so many people use a password manager like Easeenet or LastPass to organize their online accounts in real time. 

It’s also important to think about how you want your legacy to live on beyond social media, whether you want your accounts memorialized or deleted. Because digital assets can be so valuable, there is also some legal consideration in making sure your family won’t get locked out after your death.

What are the digital asset laws?

The Uniform Law Commission created the widely supported Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2015 and as of 2020, RUFADAA has been enacted in 45 states, all except California, Louisiana, Massachusetts, Oklahoma, and Washington, D.C. RUFADAA allows people to designate a digital executor and sets up a hierarchy for control of digital assets. 

A website with an online tool where users can select their legacy contact  – such as Facebook's Legacy Contact, Google's Inactive Account Manager, and soon Apple's Digital Legacy function –  is considered the highest priority, since users can change their wishes in real time. 

Next, is a digital executor designated in your will or power of attorney, and lastly, are the terms and conditions set by the website. Since terms and conditions generally favor the company that wrote them, it's critical to ensure you've designated a legacy contact or digital executor, so that your wishes regarding your digital assets are enforceable.

What about cryptocurrency and NFTs?

Current surveys estimate between 14 percent and 21 percent of American adults own cryptocurrency and while the average value is currently only between $1,000 and $2,000, there are many Bitcoin owners with millions or even billions of dollars of value in their crypto wallets. Accessing and converting cryptocurrency requires having two pieces: a public key, which is a public address identifying your account, and a private key, which is a long, secure passphrase. 

Some people store their private keys in online cryptocurrency wallets, or a “hot” wallet, though if your cryptocurrency has high value, most experts recommend storing your private key in an offline hardware wallet, or “cold” wallet, which doesn't touch the internet. Since your loved ones may not have familiarity with cryptocurrency, you'll want to make sure there are clear instructions for your executor -- again, not directly in your will, but in a separate private memorandum. Be sure to include information about when your cryptocurrency was purchased, and the cost basis,  or what you paid for it.

Non-fungible tokens, or NFTs, represent unique digital items, like digital artwork, limited edition collectibles or in-game items. As NFTs become mainstream, more people have assets in their estate that are worth significant amounts of money -- one NFT sold for $69 million dollars! Similar to cryptocurrency, NFTs are stored in digital wallets, but unlike cryptocurrency, since they are by definition unique, they can't be directly traded for currency -- they can be sold or auctioned on a marketplace.

What resources are there to help?

Over the last few years, estate planning attorneys and financial advisors have become more knowledgeable about planning for your digital estate. A variety of tools have also joined the market, including a handful of digital vaults, like Easeenet and GoodTrust

All reputable, digital vaults maintain a high level of security, let you designate your legacy contacts, and help organize accounts and other information to make it easier for your executor to take over your digital estate, though some require more manual entry than others. Advisors can help before or after a death to assist in organizing things ahead of time or doing their best to facilitate access for an executor if planning wasn't completed. 

Keep in mind, though, that pre-planning is an essential ingredient – there are no guarantees that all of your accounts will be able to be located, let alone accessed, if you haven't taken the steps to organize and preserve your digital estate in advance.

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