When you consider estate planning you probably think more about your real estate investments or your retirement account. However, you might have other investments that might not come immediately to mind. Many of us don’t think of our digital investment assets, but the reality is that they exist — and you need to plan for their disposal and protection.
Thanks to technology, our assets are increasingly far-flung.
How many of us have online bank accounts and investment accounts? And your digital investment assets might not stop there.
If you own a website and/or a blog, your domain could be worth hundreds of dollars, or perhaps your web properties generate cash flow. Some of the other digital assets to consider include:
- eBay, Amazon, and PayPal accounts. You might have balances on these sites, or you might use them to buy and sell items.
- What about your online entertainment library? If you’ve bought music from iTunes, Amazon, or some other music provider, you could have hundreds — or even thousands — of dollars worth of music. And don’t forget about digital movie and TV show collections you might have through services like UltraViolet.
- Your email accounts and social media profiles might also be considered digital assets, even if you might not have spent a lot of money in those places. You might, however, have pictures and memories stored in these areas. What happens to those?
All of your digital assets are valuable in some way or another, and can be considered investments that need to to be protected and passed on to your heirs in the manner you prefer.
Protecting Your Digital Assets
Make sure you are keeping your digital assets safe, and that they will pass on in a way you wish after you die, or are unable to properly manage them. Here are the steps to take to ensure that your digital investment assets are as protected as possible:
- Know what you have: As always, the first step to protecting your assets is to know what you have. Create a list of all of your online accounts in a secure document. You should include screen names and passwords. This list shouldn’t be left in the open. Put it in a fireproof/waterproof safe with your other important documents, or save it in an encrypted file on your computer. Make sure loved ones know where this list is kept.
- Put them in your will: Update your will so your digital assets are listed and included. Your executor should have the power to manage them and dispose of them as you like after you pass on.
- Find out the beneficiary policy of online financial accounts: What happens to your online bank account or investment account when you pass on? Find out if your accounts transfer on death, and whether or not you have the ability to name a beneficiary. In some cases, it might be worth it to set up these online accounts as part of a trust, or to close them and open accounts that allow you to pass the assets to a beneficiary upon death. Consult an estate planning attorney or someone equally knowledgeable to consider your options.
- Understand the policies of other accounts: Don’t forget to check into the policies of other types of accounts. How do you pass your iTunes library on? What happens to the money sitting in your PayPal account? Where do the HD digital movies you bought on Amazon go? Do you know how to “memorialize” your Facebook page? Do you have a mechanism for transferring ownership of your web domain to an heir or business partner? These are issues you need to resolve if you want to protect these assets and pass them on in a way that doesn’t leave things hopelessly snarled.
Just as you want to pass your more traditional assets on in a way that makes sense for you and your family, you also want to make sure your digital assets are taken care of. Plan now to avoid hassles for your heirs later.
Readers: do you have digital assets that need to be protected? What steps are you taking to ensure they are properly transferred?