Include Digital Assets in Trusts
Understanding digital assets in estate planning is crucial. From social media to cryptocurrencies, ensure you protect your digital assets by including them in your trust.
Should you include digital assets in trusts? Yes. When you think of estate planning, physical assets like homes or bank accounts might come to mind first. However, digital assets—everything from social media accounts to cryptocurrency wallets—are becoming increasingly important to include in trusts.
Not including digital assets in trusts can lead to challenges for loved ones, ranging from financial losses to lost sentimental value. (When we say to include in a trust, we mean fund a trust.)
Why Include Digital Assets in Trusts?
- Ensure Accessibility
- Digital assets often require passwords, two-factor authentication, or encryption for access. When you include digital assets in trusts, you enable the trustee to access and manage them according to your wishes. Without proper documentation, family members may face legal and technical roadblocks.
- Preserve Sentimental Value
- Family photos, email accounts, or personal blogs hold emotional significance. Including them in your estate plan ensures they remain accessible to loved ones.
- Avoid Financial Loss
- Cryptocurrency, online businesses, and other financial digital assets can be valuable. Including them in a trust prevents these assets from being overlooked or lost.
- Maintain Privacy
- Without a clear plan, some digital assets may default to public or uncontrolled access. A trust keeps your digital footprint private, even after you’re gone.
How to Include Them
1. Inventory Your Digital Assets
Start by listing all your digital assets. This can include:
- Social media accounts (e.g., Facebook, Instagram)
- Email accounts
- Cryptocurrency and online wallets
- Cloud storage (e.g., Google Drive, Dropbox)
- Domain names and websites
- Online subscription accounts
2. Document Access Information
For each asset, record the necessary login credentials, backup codes, or encryption keys. Because passwords for trustees matter…a lot. Use a secure method, such as a password manager, to share this information with your trustee.
3. Outline Your Wishes
Specify how you want to manage or distribute each asset. For example:
- Social media accounts: Should the trustee delete, memorialize, or transfer them?
- Cryptocurrency: Should the trustee liquidate or transfer it to beneficiaries?
4. Name a Trustee with Digital Expertise
Managing digital assets in trusts requires a level of tech-savviness. Choose a trustee who understands these complexities or is willing to learn how to properly include digital assets in trusts.
5. Update Legal Documents
Work with estate planning documents to include digital assets. Many states now recognize “fiduciary access to digital assets” laws, allowing authorized trustees to manage these accounts.
6. Stay Updated
Technology evolves quickly. Periodically review your digital inventory and update login credentials, especially for newly created accounts.
Include Digital Assets in Trusts
Incorporating digital assets and other non-financial assets in trusts helps ensure that the trustee handles them according to your wishes. A proactive approach prevents stress for loved ones and maintains the legacy you’ve built in the digital world.
By treating digital assets with the same care as physical ones, you’re ensuring a comprehensive and modern estate plan that reflects today’s realities. (By the way, here’s an exhaustive list of what goes in trusts.)
