Digital assets: Another reason to see your estate planner
By Dian Vujovich
Special to the Daily News
Digital assets. If you haven't heard about them, you aren't alone.
But with the average individual's digital assets worth about $30,000, according to Internet solutions company McAfee, it might be time to learn about them. There's clearly value in your online, password-protected accounts -- value your heirs might enjoy inheriting one day.
Most people, even the more sophisticated among us, don't know what digital assets are or how to value and manage them. Nonetheless, they've become the latest concern for everyone with an estate plan or in the process of creating one.
The digital assets subject is a relatively new one that hasn't been addressed much in the media or by investment professionals. And even though it hasn't been a hot topic, it's still important.
Here's a guide to becoming digital-asset savvy.
What are digital assets?
"Digital assets are digital property that has to do with our electronic computer devices," said David S. Fritz, managing director at Wilmington Trust. "It includes all of the content that we own and have stored electronically."
That means digital assets may include the content in our online bank and credit card accounts; in electronic devices such as computers, smartphones and tablets; and in our email and social media accounts such as Facebook, Twitter, and Flickr. And the list goes on.
Every online account that requires a password to access it may contain digital data that may be considered a digital asset, said Fritz, a wealth advisor at Wilmington Trust since 2002.
Assets come in many forms, including stock, dollars, diamonds, artwork, real estate or classic cars, for example.
And since digital assets have joined that list in recent years, Fritz and wealth advisers nationwide believe they should be incorporated into estate plans just like any other asset.
Planning ahead to provide your heirs with full access to your online data will help for a variety of reasons, estate attorney James Lamm told a group of wealth advisers earlier this month at PGA Resort in Palm Beach Gardens. Lamm, also editor of Digitalpassing.com, wrote in a recent blog that this is essential "to keep estate administration costs down, to provide for a smooth estate administration, and to ensure that none of your valuable or significant digital property is overlooked."
If you don't believe your online world has much value, odds are you've calculated incorrectly.
For example, a July article on InvestmentNews.com highlighted commercial pilot Dan Ashbach, who always traveled with his camera and posted many of his photos to his Pinterest account. Along the way he attracted more than 1.6 million web followers, including marketing companies.
Ashbach now brings in as much as $10,000 a month for "driving traffic to other sites through his posts," according to InvestmentNews.com.
Not everyone will have digital assets worth that much, but any blog or online business likely holds value, whether for its advertisers, content, traffic or domain name.
Even an individual's digitally stored personal memories hold value -- to the tune of about $16,600, McAfee estimates.
When it comes to managing digital assets and the passwords that protect them, there's good and bad news.
The good news? Online services exist that will do it for you.
A few of these include Dashlane, LastPass, KeePass, RoboForm and AOL's OnePoint.
The bad news? Setting up lists of accounts and passwords is time-consuming.
Although the task might seem daunting, it could be one of the best things you do for yourself and your loved ones. That's because if you die or become incapacitated without leaving online access, retrieving that information could require a court order and cost your estate additional taxes if revisions need to be made.
"People need to be aware of that and include a list of their digital assets in their estate planning just as they would their physical and tangible assets," Fritz said. "They also need to be thinking about who they are going to authorize to have access to these assets."
Accessing someone else's accounts can present a host of issues due to privacy laws and conditions accepted when creating online accounts.
But things might be getting easier. Next year, Florida is expected to adopt a law that, once enacted, would give trustees access to digital assets, making it easier to retrieve a loved one's stored data. Called the Uniform Fiduciary Access to Digital Assets Act, the law was put together by the Uniform Law Commission.
In the meantime, several data management companies service digital estate concerns, including AfterSteps, Assets In Order, BestBequest, Deathswitch, and Estate Map.
But the best way to ensure digital assets are in sync with your estate plans is to talk with your trust and estate attorney.
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