Digital Estate Plan is what you need to protect your digital assets ranging from online bank accounts to data stored on cloud storage, personal devices, and hardware. It works the same way as traditional estate planning, with a difference in assets.
Through digital estate planning, you can secure and safely pass on your digital data to the person you trust. Before starting the process of digital estate planning, you must understand what and how it takes to secure your online assets through this kind of estate plan.
Let us explore a step-by-step guide to creating a digital estate plan.
Step 1: Compile a List of Your Digital Assets
The first step is getting to know your digital assets and compiling a list. Start analyzing your data and passwords stored on spreadsheets and other notes. Include everything related to finance, clients, or your company’s decision-making. The most valuable information you can include in digital assets lists are:
- Websites and Domain names
- Social media accounts
- Computer hardware, including laptops, computers, smartphones, flash drives, and other digital devices
- Data stored on cloud storage, online, or on any physical device
- Banking information
- Mortgages or deeds
- Student loans
- Government and other important services
- Entertainment accounts, including Spotify, Netflix, and AmazonPrime
- Any digital accounts related to shopping, data storage, photo and video sharing, and gaming.
- Intellectual property, trademarks, and copyright materials.
- Productivity apps, such as 1Password
After completing this step, you will understand the breadth and depth of your digital assets in a better way. In addition, it will also give perspective on what you want to transfer to other people in the form of an estate plan.
Step 2: Decide What to Do With Your Digital Assets
Different types of assets demand different handling; you can filter out digital assets that you deem unnecessary and repetitive. For instance, while dealing with multiple digital accounts, you may delete old accounts and save the login information of current accounts. Similarly, you may consider archiving some digital assets and prefer to transfer others to trustworthy family, friends, colleagues, or business partners.
Some companies practice their policies and terms for users. Social media accounts usually come under this category, where you have to decide the future of your accounts according to those terms and conditions.
For instance, legacy policies of Facebook and Twitter let you decide what you can do with your social accounts after you pass away. Be well-informed of such policies and choose options that work for you.
You may need to decide on handling monetary assets such as digital bank accounts and stock of cryptocurrency in a specific way. Are your family or friends capable of dealing with digital transactions and other financial complications? If you own monetary assets that may increase in value in the future, consider who will own them and how they will be transferred.
Deciding the future of revenue-generating assets like an ecommerce store is crucial after you pass away. You can either decide to hand it over to your business heir or shut it down immediately. Look at every aspect of the digital asset before deciding what you want to do with it and how you would pass it on to the digital heirs.
Step 3: Decide How to Transfer Your Digital Assets
You can transfer your digital assets in a variety of ways. The basic data handover includes exporting data by creating a spreadsheet. This method is not safe and involves many risks. Anyone can access your digital assets. You can increase the security of the file through an encrypted flash drive and store it in a locker.
One of the easiest ways to hand over your data is via a password manager like 1Password. Most password managers come with in-built sharing capabilities that allow you to practice control over how much data you want to pass on. For instance, 1Password has shareable folders that do not require sensitive credentials to log into your password manager.
You can either choose to explain the working and login of the password manager on your own or simply leave instructions in your locker. At this step, an attorney or an estate planning agency can ensure the safe transfer of your digital assets to your heirs.
Step 4: Select A Digital Executor
Perhaps it is easier for you to manage your digital estate, but it can be troublesome to understand for people you are going to transfer it. Your family or friends might not be tech-savvy or understand the dynamics of digital assets. In this case, like a traditional estate plan, you should select and name an executor for your digital estate plan who will ensure the seamless transfer process.
For each digital asset, specify instructions for your digital executor who is responsible for performing this job. When you designate a digital executor, you may feel at ease as this person is qualified enough to understand, comply with regulations, and ensure the safe flow of data and information to the concerned authorities.
Make sure to nominate a person as a digital executor who is well-versed with digital assets and the execution of digital estate plans. In some states, there is no legal obligation to provide the name of the digital executor. Still, it is helpful to have a conversation with the right person. Moreover, it would also help the digital executor to follow your instructions easily and ensure the safe handover of your digital assets according to your wishes.
Step 5: Store Your Digital Estate Plan in an Accessible but Secure Location
No matter how much effort you put in to secure your digital estate, it can go all in vain if you fail to share necessary information with the concerned authorities. For instance, if the executor of your digital estate plan cannot get access to the required documents, it is impossible to carry out your will. Consider taking an attorney or a storage service onboard. Inform your digital estate plan and storage to your loved ones and trustworthy people.
For instance, you can pass on how to access and store a location to your spouse, adult children, business associate, or executor to ensure safety. This information may include the location of keys to your locker, the combination of your safe, details of an attorney, estate planning company, or an online storage facility.
In this way, the people you entrusted your digital estate with can timely access your assets and follow your instructions after death. It will result in a smooth transition and safe handover of data to the people whom you feel competent enough to comply with your wishes.
In this digital age, no one can deny the importance of a digital estate plan. You need to protect your data and information at every step. You need to decide to who you will transfer your digital assets. Creating a digital estate plan gives you the freedom to control your assets and safe passage even if you pass away.
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