What You Need to Understand About Digital Assets
When it comes to the topic of digital asset planning, many of our clients have been quick to dismiss the issue because they don’t find it relevant to their circumstances, or because they’re afraid the conversation will become too confusing. The truth is that digital assets are here to stay, and you may have digital assets that you are not aware of. If you don’t understand their effect in your estate planning, there can be significant consequences.
“Okay, first of all, what does “digital” really mean?”
We use the term “digital” to describe any information that is electronically stored. When you read an email, look at a website, or watch a video on the Internet, everything you see or hear is stored as electronic signals inside your computer or on the internet. Computers read these signals as the digits 1 or 0, and translate this information into forms we can understand, such as text, audio, or images.
The way we define digital assets at our office is simple. If you need a screen, keyboard, internet connection and/or a login name, password or PIN to access information or a device or a system, it is a digital asset. Some digital assets are not even online but are considered digital because they require a password or PIN.
“But I almost never get on the computer. I never signed up for any digital assets and I’m not interested in creating any new accounts or memberships.”
The first thing to understand about digital assets is that they’re not necessarily something you sign up for, and they’re not necessarily things that you would purchase, like stocks or mutual funds. Digital assets include any piece of electronic information that is connected to you or your estate. Two of the most commonly-held types of digital assets are email and bank accounts, but there are many other kinds of digital assets as well.
Thanks to advances in computer technology, people and companies are doing more and more business electronically. For example, even if you receive paper bank statements in the mail, your bank most likely stores your information electronically. The bottom line is that even if you never get on the computer, the companies and individuals connected with your assets are likely storing your information digitally. Therefore, whether you use your computer or not, you do have digital assets.
It’s also predicted that one day financial institutions will charge customers extra who want paper account statements instead of online or electronically transmitted statements. Why? Some companies genuinely care about the environment and going green. For others it’s about saving money because digital communications are much less costly than printing and mailing paper statements of accounts and transactions.
“This all sounds really confusing. How am I supposed to know what digital assets I own? Does it really matter? Is this really all that important?”
Yes, understanding how to identify and manage your digital assets is essential in today’s world of estate planning. The process may seem overwhelming, but it’s not difficult to get started. You can learn more about the importance of managing your digital assets by requesting a free copy of our report on digital asset planning. In the report, you’ll find a guide to identifying and managing your own digital assets.
For those connected with your estate – from fiduciaries to beneficiaries, powers of attorney, and others – having a detailed protocol for managing digital assets can save both time and money. For instance, many banks now offer digital bank statements by default, and customers have to pay a fee to receive paper statements. What happens if you become incapacitated and your power of attorney has no way to access your digitally-stored account information? Or your automatic bill payments? We can no longer rely entirely on paper-based documentation in estate planning. Like it or not, digital assets are here to stay.
To request a copy of our report on Digital Asset planning, call our office at 513.721.1513, or send an email to email@example.com