Protecting Your Digital Assets: Estate Planning in the Modern World

Protecting Your Digital Assets: Estate Planning in the Modern World

The rapid technological development that our society has undergone over the past few decades has affected all dimensions of life – commercial, legal, social, political and economic. Business transactions are easier than ever to conduct, the nature of personal relationships has evolved as online interactions become more common, and legislation has been enacted to govern this new online world. With all the convenience, ease, and opportunity that comes with technological development, also comes a unique set of challenges that need to be addressed.
 
So much of our personal lives exists online, nowadays. Living in this day and age, chances are high that you have a personal profile on at least a few different social media platforms. You also likely use online banking and other online financial platforms to help manage your money. You are also likely a member of various loyalty programs with your grocery store, gas station, travel provider, etc. The services provided by these various online platforms hold value, and as such, are assets. As with all assets, these digital assets must also be incorporated into your estate plan.
 
Let’s take a more complete look at what could be classified as a digital asset:
 
 
What are some examples of digital assets?
 
Throughout the estate planning process, you have to consider all digital assets you may hold and what you want to be done with them after you pass. Here are some examples of commonly held digital assets:

 

• Social media and networking accounts

• Loyalty and rewards programs  

• Online music, book, photo, and movie libraries 

• e-Commerce activities

• Presentations, Excel spreadsheets, Word documents

• Audiovisual media

• Websites

 
How the different types of digital assets are incorporated into your estate plan will depend on various factors that will be discussed below.  Further, if you are in search of a more complete list, please reach out to one of the team members at Bongard Wealth Advisory Group.
 
 
Digital Estate Planning
 
Take a complete inventory of your digital assets.  The first step in the digital estate planning process is to take a complete inventory of all digital assets. This includes, but is not limited to, all of the aforementioned examples of digital assets.
 
Review service provider contracts.  Once you have this list, it is advised that you take time review the contracts that you hold with the various online service providers you engage with. These contracts, commonly known as the ‘terms of conditions’ that you agree to in order to use their service, explain the nature of your relationship with your digital assets. This will allow you to determine if you are indeed eligible to transfer ownership of these digital assets to another person, upon your death.
 
For example, when you use the online services of various companies such as iTunes and Amazon Books, you don’t actually own the contents of your libraries. The fine print explains that by purchasing their services, you are paying for a ‘non-transferrable license’. You cannot, then, give this to someone else as the contract explicitly prohibits it. It is common for various loyalty programs to allow transfer of rewards points. Ensure you review these contracts so you can incorporate these digital assets into your estate plan.
 
Keep a record of passwords. Keep a complete and up-to-date record of all passwords, log-in information, and security questions. Your estate plan can identify an executor, or designated person, to have access to your online accounts and information. This will not only make your executor’s life remarkably easier when they are settling your estate, but it will also ensure that your final wishes are respected in regards to your digital identity and assets. For example, your Will can highlight which online accounts you want to be deactivated immediately and which can be maintained or stay live.
 
 
Protecting Your Digital Assets
 
The list below outlines several ways that can help decrease the chance that your digital assets are compromised and hackers gain access to your network and personal information:
 
Be weary when using public Wi-Fi networks. Considering that most public Wi-Fi networks tend to have very minimal security, you should be weary about your activity when connected to public networks. It is advised that you don’t access any financial accounts when connected to public networks. This also applies to any other online account that may contain confidential or sensitive information.
 
Take steps to secure your computer and network. Anti virus software can help protect your network from being compromised. Using a software or hardware based firewall adds another blockade that hackers need to overcome to access your information.
 
Watch out for signs of fraud/scams. One of the easiest ways that you can protect your information from fraud is to learn what fraudulent activity looks like so you can avoid it. Some common characteristics of scam and fraudulent emails include:

 

• Emails containing misspelled words.

• Emails that invoke a sense of urgency by making requests for immediate action. Some examples include: “respond within 12 hours or your account will be deactivated”, “click here immediately to claim your prize”

• Email address has a very random selection of numbers and letters.

• Asking for you to respond with your credit card or banking information

• Email address that you haven’t corresponded with before

When in doubt, type a segment of the email into a search engine. Quite often, there will be a similar query or online message boards that will say if the email is illegitimate or safe.
 
Delete files properly.  Typically, when you delete something off your computer or tablet, it isn’t actually deleted permanently. Deleted files can still appear on your device’s hardware until it is overwritten with new data. Ensure that you go through the proper digital file disposal procedures to ensure that any sensitive information is properly deleted and unable to be re-retrieved. This is especially important to keep in mind if you are selling or disposing of an old device.
 
Strengthen your passwords.  It is common sense that you shouldn’t share your important passwords with anyone, unless they absolutely must know (i.e. joint account with a spouse). Even when it comes to your power of attorney or executor, do not reveal passwords pre-emptively.
 
You can further strengthen your passwords by making them a unique combination of letters, numbers, and special characters. Try to make passwords unique from one another by not repeating the same password across multiple platforms. Passwords should be changed regularly. 
 
 
Conclusion
 
Considering our world is becoming increasingly digitized, it is crucial that we understand how to change with the times. When estate planning, make sure you review your various digital assets and incorporated them into your Will and estate plan. This protects your assets and ensures that your online affairs are properly dealt with after you pass.
 
Further, by following these basic guidelines and practicing safe online behavior, you are reducing the chance you become a victim of cyber attacks, identity theft, and various other crimes. If you have more questions about cybersecurity, digital assets, or estate planning, please reach out to Bongard Wealth Advisory Group for more information

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