The way digitization has changed the world has brought new challenges to estate planning. Best practices and the laws pertaining to digital assets often lag behind technological advances. New York residents may be interested in learning why protecting digital assets is just as important as protecting physical assets.
Digital assets would include things like a person's email account, their website, credit card reward points, photos posted on Facebook and on other social media sites, cryptocurrency and software programs. These digital assets carry real monetary value. It is estimated that the average person has over $35,000 in digital assets. These also have sentimental value, like online photos or emails between family members.
Keeping track of where digital assets are located online and keeping track of login information is the first step in managing existing assets. It is also important to understand ownership rights, which are outlined in Terms of Service agreements. But these agreements can be tricky because some state that when a person dies, their online accounts cannot be transferred to anyone else. This leaves the assets in a state of eternal limbo.
Some have the mistaken idea that traditional estate planning covers all digital assets. However, digital assets create unique challenges, including that they can be hard to find online, accessing them can be difficult because of protected usernames and passwords, and ownership rights may not be clearly defined. In the case of a death, there is a risk of online theft or abuse of digital assets.
When it comes to updating a will, individuals need to be broad in their approach. An estate planning lawyer may help a client update their will in order to cover both physical and digital assets. They might help them draft other legal forms as well, including a power of attorney, special needs trusts or living wills.