Ted (00:00.056)

Have you ever wondered what happens to your Facebook account, online banking, or thousands of family photos when you’re gone? What about your cryptocurrency or purchased music files? Well, today I’m addressing a critical question most people never consider. Who gets access to your digital life after you’re gone? I was speaking with a client last week who was stunned when I asked about her digital asset plan.

Like most people, she had never thought about what happens to her online accounts and digital memories after death. Yet in today’s world, these digital assets have become an essential part of our legacy that requires proper and very detailed planning in order to protect. So what exactly are digital assets? Simply put, they’re any electronic records that you own or control.

Think about all the different online accounts and digital items you interact with daily. Your Facebook, perhaps Instagram and Twitter accounts are all digital assets. But so are your online banking portals and investment platforms. Those thousands of family photos stored on your iPhone or in Google Photos, those are digital assets too. Your email accounts, both personal and professional, count as well.

For some of us, there might be cryptocurrency or Bitcoin holdings to consider. Even things like domain names you’ve registered or websites you’ve built are valuable digital assets. The music you’ve purchased over the years, whether you downloaded it from iTunes or what’s now called Apple Music, or maybe even ripped from tapes if you’re from my generation, those files are yours and part of your digital estate.

growing up, my parents had shelves full of photo albums documenting our family history. Today, most of us have replaced those physical albums with digital storage, making these memories even more important to protect properly. These digital assets have woven themselves into the fabric of our daily lives in ways we often don’t fully appreciate until we step back and take inventory. Just pause for a moment.

Ted(02:21.151)

and consider how much of your important information, cherished memories, and even financial assets exist primarily or exclusively in digital form. It’s quite eye-opening, isn’t it? And just like your physical possessions, bank accounts, or real estate, these digital belongings need to be considered thoughtfully in your estate plan so that they can be properly managed and distributed according to your wishes.

when you’re no longer here. Now, you might be wondering, why is it so important to include digital assets in my estate plan? Can’t my family just figure it out when the time comes? Well, unfortunately, it’s not that simple. And without proper planning, your loved ones could face some very serious challenges. Let me share a quick story that illustrates why this matters. A few years ago, I had a family come to me in distress.

because their father had passed away suddenly and they had no way to access his online banking accounts. He had been handling all the family finances digitally with paperless statements and without his passwords, they were completely locked out. The bank simply could not grant them access without proper legal documentation. And even then, the process was lengthy and very complicated. Meanwhile, bills went unpaid.

and financial matters that needed immediate attention were left in limbo, adding stress to an already difficult time. The financial implications of not planning for your digital assets can be significant. Banks, investment firms, and other financial institutions have strict policies about account access. And without proper authorization, those funds might become temporarily or even permanently

inaccessible to your heirs. Even with a valid will, gaining access to digital accounts can be complicated by terms of service agreements that you click Agree without even reading the fine print. We’ve all done it. Many of these agreements don’t account for what happens after death, creating legal hurdles for your family. There’s also the very real risk of identity theft to consider.

Ted(04:41.877)

In today’s world, cyber criminals are constantly looking for opportunities and inactive accounts of deceased individuals present prime targets. If your digital assets are not properly managed after your passing, someone could potentially hijack your accounts and use your identity to open credit cards, take out loans, or commit other types of fraud. This can create a financial and administrative nightmare.

for your loved ones to clean up all while they’re grieving. So what steps should you take to properly plan for your digital assets? First, I strongly recommend creating a comprehensive digital asset inventory. Think of this as a roadmap for your executor or trustee. Without it, they’ll be navigating in the dark.

You might create a spreadsheet listing all your important digital accounts and assets, including details like the platform or website name, your username, but not passwords. We’ll talk about those separately and what type of asset it is. For instance, you might categorize them as financial, social media, email, cloud storage, entertainment, or cryptocurrency. Be thorough in your inventory.

Remember, those photos I mentioned, know where they’re stored, whether that’s on your computer’s hard drive, in Apple Photos, Google Photos, or somewhere else. If you store important documents in the cloud, like in Dropbox or Google Drive, make sure to include those in your inventory too. Many of us use these services to store things like tax returns, financial statements, and other important records.

And if you own cryptocurrency, this requires special attention because of its unique security features. If your family doesn’t know about your digital wallet or how to access it, those assets could be lost forever. There have been cases of millions of dollars in cryptocurrency becoming inaccessible after someone’s death simply because no one else knew how to access the wallet.

Ted(07:02.995)

or had the necessary keys. I’m in a reading about a man who had millions in Bitcoin but died suddenly without sharing his wallet information. All that value essentially disappeared because no one could access it. After creating your inventory, the next critical step is appointing a digital executor. This should be someone you trust implicitly to handle your digital assets according to your wishes after you pass away.

Ideally, this person should be at least moderately tech savvy. They don’t need to be a computer programmer, but they should be comfortable navigating online accounts and following your digital instructions. They should also understand the importance of your digital assets and respect your privacy while carrying out their duties. Have an honest conversation with this person before naming them in your estate plan to make sure they’re willing to take on this responsibility.

Your digital executor or digital trustee will need clear, detailed instructions on how to access and manage your various digital accounts and files. This brings us to one of the most crucial aspects of digital asset planning, access and passwords. Without this information, even the most well-intentioned executor or trustee will be severely limited in what they can do.

I strongly recommend using a password manager. I happen to use LastPass, but there are others. OnePassword or Dashlane are some of the other examples. These are used to securely store all your login credentials. These services not only keep your passwords encrypted and secure, but they can also generate strong, unique passwords for each account so you’re not reusing the same password everywhere.

which is a major security risk. Most password managers have features specifically designed for emergency access or legacy planning, allowing you to designate someone who can request access to your vault under specific circumstances. This is much safer than keeping a list of passwords written down somewhere. That poses obvious security risk. If you do need to have physical copies of your passwords,

Ted(09:32.021)

consider storing them in a lock safe deposit box or in a secure home safe that only trusted individuals can access. The beauty of using a password manager is that your executor or successor trustee would only need one master password to gain access to all your other passwords, significantly simplifying the process while maintaining security. From a legal standpoint,

There are important considerations to keep in mind when planning for your digital assets. You’ll want to update your will or trust to include specific provisions for these assets, particularly if you have preferences about how they should be handled. For example, you might want certain family members to receive specific digital collections, like your music library or your digital art.

you might have preferences about what happens to your social media accounts, whether they should be memorialized, like Facebook offers, or deleted entirely. Having these wishes clearly documented will help ensure they’re carried out appropriately. For your legal documents, it’s crucial to consult with an experienced estate planning attorney who understands digital assets. Not all attorneys are well versed in this relatively new area of estate planning.

So look for someone with specific knowledge or experience with digital assets. Make sure your will and any trust you have are properly updated to include provisions for your digital property. In my office, we use a service called Legal Directives where clients can store digital copies of their estate planning documents securely. This system allows you to provide login credentials to family members so they can access these important documents when needed.

This kind of digital storage can be invaluable, especially in emergency situations when physical documents might not be immediately accessible. Let me share some common pitfalls that I’ve seen clients endure when planning for digital assets so you can avoid them. One of the biggest mistakes is creating a digital inventory but then failing to keep it updated. If you’re like most people,

Ted(11:53.375)

you probably sign up for new online services or create new accounts regularly. Some of these might be significant, like a new investment platform or cloud storage service. While others might be less important, shopping accounts or subscription services. It’s a good practice to review and update your digital inventory at least once a year or whenever you create important new accounts. This ensures your executor or successor trustee

will have a complete and accurate picture of your digital footprint. Another common mistake is not properly informing your digital executor or trustee about their role and responsibilities. This is actually a problem I see with estate planning in general. People often name executors or trustees or power of attorney agents without having detailed conversations with them about what those roles entail.

Your digital executor needs to understand what you’re asking them to do, where to find your inventory and access instructions, and any specific wishes you have for particular assets. They should also know where to find the legal documents that authorize them to act on your behalf. Having this conversation might feel uncomfortable, but it’s essential for ensuring your plans are carried out smoothly.

Lastly, never assume that your loved ones will automatically have access to your accounts after you’re gone, even if they know your passwords. Most digital service providers have terms of service that prohibit account sharing and don’t automatically recognize rights of inheritance. Without proper legal documentation and planning, your family might face significant barriers to accessing your accounts.

regardless of how simple it might seem. The law in this area is still evolving, and many digital platforms have their own policies about what happens to accounts after a user’s death. Digital assets are a crucial, yet often overlooked, part of your estate plan. Without proper planning, your family could lose access to your financial accounts, precious memories, and important documents.

Ted(14:18.399)

Take time today to inventory your digital assets, appoint a trusted digital executor or trustee, and ensure your estate planning documents include very specific instructions for handling your online life. Your digital legacy deserves the same protection as your physical assets. Well, if you found this helpful and want to see how these digital asset strategies fit into a comprehensive estate plan,

Watch our next video, where I’ll walk you through a detailed case study of a $3 million estate plan. You’ll see exactly how we protected one family’s entire legacy, both digital and physical, from probate courts, predatory claims, and unnecessary taxation.