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Digital assets: Is it time to update your estate plan?

Despite the value placed on digital assets, most people have not accounted for them in their estate plan.

Would you like to go paperless? When performing tasks online, this is a routine question, which allows people to opt out of receiving paper copies of important information, such as bank statements and medical bills.

As more people are enjoying the ease of online transactions and are taking advantage of social media sites, the value of the average person's digital assets is increasing. According to a study conducted by McAfee, on average, Americans consider their digital assets to be worth around $55,000.

Despite the high value we afford these assets, most people fail to account for them when making an estate plan. When digital assets are not addressed in an individual's will or trust, the administrators of the estate can face significant hurdles.

Identifying digital assets

The first problem people encounter when an individual has not accounted for digital assets in his or her estate plan is simply identifying all of the assets found online.

Digital assets can range from financial accounts to social media sites to rewards programs for hotels and airlines. Without a list of all of this important information, it can be time-consuming and challenging to identify all of an individual's digital assets.

Someone may have multiple financial accounts - including checking, savings, mutual funds and other investment accounts - with different financial institutions. If he or she has not made a list of those specific accounts, those in charge of the estate may not even be aware they exist.

The information stored in social media accounts - including Facebook, Twitter, LinkedIn and photo sharing sites like Instagram - may also have value. In addition, many people have subscription services with companies such as Netflix and Amazon, for which charges will continue to accumulate if they are not cancelled.

Finally, many people manage their mortgages, credit cards, car loans and other debt online. These are often through different institutions than their other financial accounts.

Gaining access to digital assets

Even when an individual creates a list of all of his or her digital assets, administrators of the estate can still encounter difficulties if login information has not been provided. It is a good idea to provide, on a separate document, user names and passwords for each account. As such information is important, steps should be taken to protect the security of the login information document.

If you have not accounted for your digital assets in your estate plan - or if you have yet to make an estate plan - you should take prompt action. Consulting with a skilled estate planning attorney will ensure you make the appropriate decisions when planning for the distribution of your assets.

Keywords: digital assets, will, trust, estate plan

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