Digital Assets: What Happens to Them When You Die?

Today, you can access almost anything through the internet. The internet is a convenient way to handle communication, business activities, and social interactions. The speed at which technology has accelerated over the past few decades is astounding. You can also access just about anything you want including your personal finances, photo memories, music, shopping, and loyalty programs from the convenience of your smart phone. As we are able to access more and more online, we accumulate a larger digital footprint.

Figuring out what happens to these digital assets after death can be confusing. Ownership may not be as easy to transfer as physical assets. And those who are in charge of managing your estate may have difficulty finding and accessing your digital assets.

What are digital assets?

Estate planning experts recommend creating an inventory of all your digital assets with the relevant usernames, passwords and security questions as part of the instructions you provide to the trusted person who will settle your estate. This may seem like a huge task, but the first step is to complete an inventory of logins and passwords.

• Email accounts: Gmail, Yahoo, work email
• Financial Accounts: PayPal, Venmo, Zelle, bank or investment institutions, credit card logins
• Social media: Facebook, WhatsApp, Twitter, Linkedin, Instagram
• Storage and file sharing: Dropbox, iCloud, Google Drive
• Rewards: Travel rewards, credit card points, retailer loyalty programs
• Shopping services: Amazon, Target, Walmart, Etsy, eBay
• Blogs and online businesses: hosting services, GoDaddy, TripAdvisor
• Gaming accounts: Xbox, PlayStation, Kongregate
• Video services: Netflix, YouTube, Hulu, SlingTV
• Music services: Spotify, Apple Music, Pandora
• Books: Kindle, Goodreads, Audible, Apple Books
• Photo sharing and storage: Shutterfly, Flickr, Photobucket, SmugMug
• Online dating accounts: Match, Tinder, eHarmony
• Virtual currency: Bitcoin, Ethereum, Zcash, Dash

Once you have an inventory, you can store it someplace safe like your safe deposit box or in a file that is password protected on your computer. Make sure that your executor of your estate knows where that list is located so they can reference it when you pass away.

What all these digital assets have in common is that transferring ownership of these assets isn’t as easy as naming a beneficiary for a home or bank account.

Do digital assets pass through your will?

A will is where you generally specify how assets are passed to heirs or other designees. You may be interested in transferring ownership of digital assets through your will. For instance, you might want to transfer your cryptocurrency balance or your credit card rewards. But this isn’t always going to work for a couple of reasons.

While you may want to specify that an heir will inherit your accounts, sometimes companies will have terms of service that prevent the transfer of access rights. For example, digital music and books are often non-transferable. While you may “own” the books or music you’ve paid for, you do so subject to the licensing restrictions the seller put in place. Some travel or other loyalty programs do not allow transfers, but having access to the owner’s account will allow heirs to retain those benefits. The rules are different for different programs, so it’s best to do your due diligence to determine if and how you can pass along your loyalty rewards.

Best practices for passing along your digital assets:

• Make a list of digital assets as well as usernames and passwords to access them, and keep it in a secure place where your family members can find it.
• Decide what you want to happen to each account and who should be provided with access.
• Research the terms of service for websites you use to understand what right you have to transfer your account after your death.
• Review your state laws to understand the default rules for your digital accounts when you pass away.
• When possible, complete the appropriate process with the companies that hold your digital assets to specify who should be allowed access after your death, if anyone.
• Work with an estate planning attorney to develop the right documents, such as an advanced directive, powers of attorney, or will to specify who has the right to your digital accounts.