How to Avoid Problems With Digital Assets in a California Estate Plan

Introduction

Digital assets have become an important part of modern life. Online banking, investment accounts, digital photographs, social media profiles, cryptocurrency, websites, and other electronically stored information may have financial or personal value. Without proper planning, these assets can be difficult for loved ones to identify, access, or manage after someone dies or becomes incapacitated.

Identify and Organize Your Digital Assets

A good estate plan begins with knowing what digital assets exist. Make a private inventory of important accounts, digital property, subscriptions, websites, and other online services. The inventory should be reviewed periodically because digital accounts and services can change frequently.

However, an inventory should not simply contain a list of passwords. Account providers may have their own rules concerning access, and sharing credentials can create security concerns or violate contractual terms. Instead, consider using a secure password manager or another protected method for storing login information and instructions.

It is also helpful to distinguish between digital assets that have financial value and those that have primarily sentimental or personal importance. Family photographs, videos, personal documents, and online correspondence may be just as important to loved ones as financial accounts.

Give Clear Instructions for Management and Access

Estate planning documents should address digital assets where appropriate. California law provides a framework for fiduciaries dealing with certain digital accounts and electronic communications, but access is not necessarily automatic simply because someone has been named an executor, trustee, or other fiduciary.

Your estate plan can provide instructions about how you want digital property handled and may identify the person you want to manage it. Account-specific tools, such as designated legacy or access features offered by some providers, may also play a role. The exact process can vary depending on the type of account and the provider’s policies.

Cryptocurrency and other digitally stored assets may require additional planning because losing access information can make the property extremely difficult to recover. Instructions should be sufficiently clear to help the appropriate fiduciary locate and manage these assets while protecting sensitive information from unnecessary disclosure.

Conclusion

Digital assets should not be overlooked when creating or updating a California estate plan. Taking time to identify important accounts, protect access information, and communicate your wishes can help reduce confusion and potential disputes later.

This article provides general information about California estate planning and is not a substitute for legal advice. Laws, account agreements, and individual circumstances can affect how digital assets are handled. Readers should consult a qualified estate-planning attorney regarding their specific situation and estate-planning needs.