With more and more of our lives being lived online, estate planning has gone beyond just physical and financial assets and has broadened to include digital assets. Known as ‘Estate Planning 2.0,’ digital estate planning deals with the handling and distributing of digital assets after death—a crucial part of modern inheritance.
As more of our lives go online, digital estate planning has become more and more important. It’s an answer to owning the digital legacy we’ll have after we’ve left, including how assets like social media accounts, online subscriptions, and even digital files are reachable to loved ones after us. Digital estate planning does more for assets than just protecting them; it preserves sentimental memories for family members by remembering that some of the most valuable memories, in pictures, videos, and other documents, should also remain accessible.
The tech that inspires and influences us grows along the way. We are producing lots of digital footprints these days; from social media accounts to digital wallets, online subscriptions, and cloud storage. This transformation requires a new way of thinking about estate planning and digital assets in concert. Digital assets, unlike traditional physical assets, are frequently subject to complex terms of service and privacy laws that make accessing and transferring the asset after death difficult. In 2021, the Internet Crime Complaint Center (IC3) reported a total loss of $6.9 billion due to cybercrime in the U.S. This figure has been steadily increasing since 2017, indicating a growing threat to digital assets and underscoring the importance of secure digital estate planning.
Preserving the financial value is not the only aspect of digital estate planning integration into traditional estate planning practices: it’s also about retaining sentimental and personal information. Nevertheless, photos, videos, and documents stored online often hold great emotional weight for loved ones left behind and these need to be preserved, as well as properly managed. In addition, if digital assets are not planned carefully, they will move into the hands of those who can steal personal identity or are hindered by legal and technical constraints preventing access to families who do not know how to create certain wallets.
UNDERSTANDING DIGITAL ASSETS
- Social Media Accounts: Social media tools that include but are not limited to Facebook, Twitter, Instagram, linking, and TikTok are part and parcel of our lives. They include personal pictures, messages, friends, and families among other things which people have a sentimental value attached to. Further, it can have monetary value if the creator is an influencer or has some sort of account monetization.
- Email Accounts: Gmail, Yahoo, and Outlook among others are examples of email services, that act more like archives of personal/ professional communication. They may include important information such as bank statements, letters, and other documents, as well as connections to other accounts.
- Financial Accounts: Internet banking and stock trading along with other digital money services would come under this section. Such assets include accounts in internet-based banking interfaces, stocks, bonds, mutual investment products, and even crypto-shares such as Bitcoin and Ethereum. They need appropriate planning so that the beneficiaries can avail those wallets without running afoul of the law.
- Digital Property: This includes domain names, websites, blogs, and online businesses. Such assets can sometimes have high monetary value, particularly if people visit them and use them often.
- Digital Content: This category comprises eBooks, music, movies and cinematographic work, and licenses of software. These assets may be owned and transferred differently depending on the conditions of service contracts with the content suppliers.
- Virtual Goods and In-Game Assets: Virtual goods are objects, tangible and intangible, within online games and virtual worlds, moreover, they include avatars, virtual real estate, and in-game currency. Despite this, these assets can carry a real monetary worth and can become components of a person’s property.
STEPS IN DIGITAL ESTATE PLANNING
Creating a comprehensive digital estate plan involves several steps:
- Inventory of Digital Assets: Make a list of all digital properties and alternatives including user IDs passwords and security codes. This inventory should be updated frequently.
- Designation of a Digital Executor: Choose a dependable person who will be in charge of, and operate, the digital assets. He or she should possess the characteristics of a computer literate person and should know the job responsibilities. It is vital to decide on the digital executor. This person ideally should be tech savvy, understand why it’s important to use a professional who can ensure these sensitive accounts are properly managed according to the wishes of the deceased, and also be willing to make sure that the deceased’s wishes are carried out.
- Legal Documentation: Put instructions for digital assets in the will or create a different legal instrument. Make sure that it does not break any particular laws and doesn’t violate the rules set by any site.
- Use of Digital Estate Services: Explore using password services due to digital estate planning, and there are password services that can help manage digital asset information.
- Regular Updates: It is recommended that the owners revise and update the digital estate plan periodically by changing assets, passwords as well as personal preferences.
LEGAL LANDSCAPE
The legal regulation of digital estate planning is still pretty active since digital assets are not historically considered parts of estates yet. Due to the fact that different states and countries have different laws pertaining to the handling and distribution of digital assets in cases of death, this is an area of law that studies present as having multiple legal issues that need to be solved for the purpose of estate planning.
As part of that legal landscape around digital estate planning, greater privacy is balanced with the ability to access the information. However digital assets can be tough to verify, and without proper planning, these digital assets can be inaccessible due to service agreements and privacy laws.
Furthermore, social media has standard policies and conditions of service that the general public needs to adhere to, hence, it can override state laws. All these agreements contain provisions regarding what should happen to an account in case the owner dies. For instance, some services may enable an Account Deletion or enable an Account Memoriam, while others may not allow access to such an Account by anyone aside from the Account Holder. This results in the emergence of a regulatory quilt that can make it difficult the handle digital assets.
In the United States, the Revised Uniform Fiduciary Act (RUFADAA) recognizes fiducial including executors and trustees for assets in digital Broadway.
RUFADAA was passed in 2015 and has been implemented in most states to enable fiduciaries to enjoy powers to gain control and disperse digital assets in accordance with the intention of the deceased. However, the act complements this freedom with workers’ privacy rights with protections, which usually, have the account holder’s consent either through a will or other legal papers. Laws containing rules of data accessibility and transfer, including the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA), restrict data accessibility. These laws are put in force to protect the privacy of users, however, they can also complicate the post-mortem administration of digital assets by a fiduciary, as many of the accounts will be locked down immediately.
CONCLUSION
Digital estate planning is one of today’s cornerstone concepts of inheritance which facilitates in handling and passing on of digital assets according to the owner’s wishes. But if you take proactive steps, you can ensure your digital legacy exists and help your loved ones to have the clarity and peace of mind that it does. The advent of digital assets has radically altered the way estate planning needs to be laid out and the thinking that goes along with it. As digital assets have become ubiquitous, traditional estate planning methods that primarily focus on physical and financial assets, are no longer sufficient to address the complexity posed by digital assets.
From social media accounts to cryptocurrencies, these assets are both great in financial value, but also with sentimental value, so it becomes crucial to properly manage these assets.
All in all, digital estate planning is not optional with traditional estate planning, but a must-have integral component. Digital estate planning lets you take proactive steps to protect your digital legacy, as well as let you benefit by giving up valuable assets both sentimental and financial to and managed by designated beneficiaries. Realizing the value of the digital asset and taking what measures are needed to control them, all individuals may protect their digital legacy, protect their relatives from potential liability, and legal or financial problems, and provide a guarantee that their wishes will be complied with. But running with digital estate planning today means securing lasting benefits and peace of mind for the next generation.
Author(s) Name: Shubhani Mishra (Maharashtra National Law University, Nagpur)
