Do you ever stop at some point in your life and wonder what would become of your properties in the unfortunate incident of your death? It is a picture that is hard to fathom. Luckily, through will and estate planning, you can now allocate who gets what and when.
The biggest asset for most small business owners and entrepreneurs is often their business. Taking steps to protect your business after your death is one of the best things you can do as a business owner.
Most people only focus on the physical assets, forgetting that other intangible properties like digital assets bear as much value. In this current world where the use of internet has become universal, most people possess some financial and personal information online.
Many people become solo entrepreneurs, start making money online and even own an online business. However, the problem sets in when you have to incorporate all this into your estate plan.
What Are Digital Assets?
Digital assets are basically the online financial accounts, personal email accounts, social media accounts, websites and every other account you may own in an online platform.
So, what happens to your digital assets when you die? Even if you are a solo entrepreneur, it is irrational to assume that any digital asset has no value and leave it out.
Some of these assets have functional value to your business and also your personal life. They can be redeemed or even sold as intellectual properties after your death and generate income to your beneficiaries.
Plus, most small business owners, who grow their businesses offline, have adopted the paperless approach of doing business. As a result, they are highly dependent on emails and online accounts. Most business owners will agree that most bills, insurance policies, and other crucial business information are sent or received via email.
With their inclusion in your estate planning, it becomes easy for your estate executor to access and wrap up all your final affairs without predisposing your digital assets to the risk of loss or unauthorized access.
Digital Assets Estate Planning
Conventional estate planning is by far a more manageable task than planning for digital assets. With the former, your executor readily accesses the information necessary to gather and safeguard your assets, contact creditors, and oversee your business as a caretaker.
On the other hand, do you wonder what happens to digital assets when you die? Managing digital assets is an increasingly challenging endeavor due to the constraints of both time and authorization surrounding their access.
Unfortunately, it is even more challenging when dealing with online accounts.
Contrary to what you may be thinking, surrendering your username and password for these accounts may not be sufficient enough to grant access to your executor and the beneficiaries. Most of them come in service-agreement limitations that are likely to hinder the ability to access, manage, or even close them.
Steps Towards Effective Digital Assets Planning;
1. Keep an Updated List
As an asset owner, it is prudent to keep track of those digital assets you own and intend to pass on to the beneficiaries or the members of the family. Putting them to account eliminates the risk of forgetting anything that is of both monetary and sentimental value.
To make it efficient, you can track your online accounts with computer programs or better yet keep a hard copy of all the information you want to share in your will.
Moreover, keeping the vital information regarding an online account comes in handy to ensure that the info passed down is accurate and will not present problems to the new owners.
Additionally, investing in the services of a password manager could be appropriate at this juncture. With these expert services, you can effortlessly prepare in advance to transfer your digital assets after death to your executor.
2. Include Information on The Utilization Of Your Digital Assets
In case of severe health issue or even death, you will have no control over what you will leave behind. However, you can write down instructions for all your digital assets in your will about what will happen to your digital assets. Whether you want some of your accounts scrapped or some information published, all that is required is your word in your last will.
Furthermore, you can also name whoever you want this information and accounts to be passed on to and grant your executor access to pass to them. Doing this is highly recommended especially if your heirs are minors.
3. Inform Your Family
When you are a solo entrepreneur, the accounts to access your website or your online business are often personal and many don’t know of their existence. Hence, when you plan on including them in your estate planning, it is wise to involve your family.
Speaking to them beforehand or writing it down and passing the letter to your representative to deliver to them is an efficient way to inform them of your plan.
This step works to clear the air on how your beneficiaries or the members of the family will access and use the accounts or online information you leave behind.
It is important to note that not all may have the understanding of the financial value of these digital assets, and hence, an explanation from you whether in person or in writing on the will go a long way in helping them come to terms with the facts of these digital assets. In the case of precious digital assets, hiring financial experts to help your heirs manage or sell them is highly advisable.
4. Appropriate Planning
Legislation on passing down digital assets is yet to be fully instituted by law. As a result, laying down a plan with your lawyer to include them in your estate will go a long way in legitimizing the process. Besides, acquainting yourself with the service agreements of your various accounts helps you to understand what you can legally do with them as far as passing them down to others is concerned. Nonetheless, this process is quite long and tedious but absolutely worth it.
Failure to do digital assets estate planning could lead to incomprehensible losses. It would leave your loved ones in a devastated state, having to bear with your loss and the loss of your assets. Besides, you may end up giving your executor a hard time tracking all your assets down and this may lead to losses.
There is no worse feeling than that of a salvageable loss. Hence, you should save your beneficiaries from the struggle of accessing these accounts by including them in your estate planning. Also, it could expose your entire estate to the risk of hacking and fraud if such accounts are not followed up and closed if they will not be of use to the beneficiaries.
It is not such a bad idea to keep your estate planning attorney at your beck and call for assistance when navigating the law about digital assets planning. Utilizing the service of an estate planning attorney and a trusted executor ensures that your beneficiaries get the best out of your digital assets.
Author: Victoria Hill studied communication arts and worked with the magazine editorial team in Sydney before joining an art team at another ad agency. She has been writing as a ghostwriter ever since she was in college. Her favorite topics covered human development, business communication, modern and pop art, minimalism, and self-development.