Imagine this scenario: Your spouse, an enthusiastic photographer, passes away suddenly. Amidst your grief, all you desire is to revisit your cherished family photos, securely stored in the cloud. However, you find yourself unable to access them. Worse yet, retrieving these precious memories might entail exorbitant expenses and drag you through numerous courtroom battles, potentially constituting the most daunting legal ordeal of your life.
This might sound extreme, but it's a reality faced by many worldwide. The issue of managing digital assets in estates is increasingly prevalent and poses significant challenges. Below are just a few examples illustrating how digital assets are impacting estates today.
What are digital assets?
Digital assets encompass a wide array of items, ranging from emails and their attachments to texts, social media profiles, financial statements, cryptocurrencies, domain names, and even online gaming collectibles. Essentially, anything stored online or in a cloud that belongs to you qualifies as a digital asset. Similar to physical assets, these digital assets require proper planning in your will.
This entails setting up beneficiaries to receive the contents of an online account or app and specifying the desired actions to be taken with that account, such as closure, deletion, transfer, and more. By addressing digital assets in your will, you ensure that your online presence and possessions are managed according to your wishes after your passing.
Protecting Your Digital Assets
Securing your accounts and property and ensuring they reach the intended recipients after your passing isn't as straightforward as many assume. While some may believe that maintaining a list of accounts and passwords will provide access, this approach isn't legally sufficient and can actually create more significant challenges for your loved ones and heirs.
What is the significance of Digital Assets in Estate Planning?
Digital assets diverge from physical assets like houses, cars, or jewelry, adhering to distinct rules and requirements. Frequently, these requisites are delineated within the Terms of Service Agreements that individuals often overlook when creating an online account or downloading a new app. However, nestled within these legally binding agreements lie provisions dictating the fate of your account in the event of your passing. Failure to adhere to these rules and regulations may result in the expiration or auto-deletion of your account. Consequently, everything stored in the cloud could potentially be lost forever.
Secure data refers to information that is encrypted and inaccessible under any circumstances. This includes data stored within vaults in password database accounts, which are encrypted using secure cryptographic keys solely in the possession and control of customers. Neither can we access nor provide decrypted secure data, nor do we ever receive copies of unencrypted secure data.
It's crucial to understand that anyone possessing both your Secret Key and Master Password can access your secure data. Therefore, it's essential to keep a copy in a secure location for your reference, as future access depends on having both your Secret Key and Master Password.
While we cannot decrypt your secure data, website and app owners are obligated to uphold strict standards for protecting your privacy. Failure to adhere to these laws and policies may result in significant penalties and fines.
Why Sharing Passwords Does Not Work
Sharing passwords with others may seem like a practical solution for accessing digital assets, but it's not an effective strategy. In reality, this practice can lead to significant issues and consequences. When someone else uses your login credentials to access your accounts, it constitutes a breach known as Account Holder Impersonation. This action violates various laws and Terms of Service Agreements. Additionally, passwords often change, and accounts may have additional security measures like two-factor authentication, complicating unauthorized access attempts. Mistaken attempts to access accounts could result in the executor being permanently locked out or mistakenly flagged as hacking. Ultimately, sharing passwords improperly can create legal trouble for your loved ones and jeopardize the security of your digital assets.
Considerations for managing your digital assets
Digital assets encompass a wide range of online accounts and properties, from cryptocurrencies and domain names to social media profiles and cloud-based storage. These assets can hold significant financial, emotional, or functional value for your beneficiaries. Therefore, it's crucial to carefully consider their importance and purpose, as well as the necessary actions to be taken.
Managing digital assets effectively requires two types of directives. Firstly, clear instructions are needed for disclosing account information. This involves designating a trusted individual or entity with access to your important data and contents, ensuring that accounts and assets are handled appropriately.
Secondly, action-oriented instructions are necessary to dictate what should be done with each account. This could involve account closure or deletion, name removal from family share plans, or transferring ownership. Some content providers may offer additional options, such as Facebook's memorialization feature, which allows designated individuals to make posts on your profile for events like "celebration of life" notifications.
Take Control of Your Digital Assets
Taking control of your digital assets requires some effort, but it's an essential task. Begin by compiling a list of your accounts and apps, noting your associated login username or email, and assessing their financial or sentimental value. Avoid including passwords on this list, but ensure you update it regularly with any new websites or apps you use.
To ensure your wishes are honored, designate someone in your will to receive disclosure of your account contents. Keep in mind that companies may refuse access without explicit authorization. Additionally, provide clear instructions on how each digital asset should be managed. Please note that these designated individuals will not have direct access to your accounts, but they will likely receive a portable drive or access to a cloud file containing account contents.