What is a digital estate plan and why should you have one?

From social media profiles to online bank accounts and cloud storage, your digital life holds more value and complexity than ever before.

That’s why digital estate planning is now an essential part of modern life.

Unlike 20 years ago when a few passwords on a scrap of paper might have sufficed, today’s digital asset planning involves managing a vast and varied legacy of online content, accounts, and data.

Putting a plan in place can save your loved ones time, stress, and confusion when you're no longer around.

What is a digital estate plan?

A digital estate plan is a document or set of instructions that outlines how a person's digital assets and online accounts should be managed or disposed of after their death or incapacity.

Digital assets may include emails, social media accounts, online banking and investment accounts, photos and videos, and other forms of digital property. 

A digital estate plan typically includes details on how to access these accounts and assets, who should be granted access, what should be done with data and how to manage outstanding debts or liabilities related to these accounts.  

Do I need a digital estate plan?

Unless you’ve been living off-grid, even the lightest users of digital media will need to consider their digital assets in a will.

If you have any of the items in our digital asset checklist below, then you definitely need to plan your digital estate.  

Why is digital estate planning important?

It is essential to have a digital estate plan to ensure your online assets are properly handled and protected and that your wishes are respected after death or incapacity. 

Creating a digital estate plan is also becoming increasingly important as more and more of our lives are lived online.

Without a digital estate plan, it can be difficult or impossible for family members or loved ones to access and manage a person's digital assets after their death or incapacity.

You should undertake digital asset planning as a standalone project or as part of broader considerations to assist your family in dealing with your finances after you’re gone. 

Digital estate planning checklist

Digital assets are dynamic and evolve with software and technology, so you should always keep your digital estate under review.

To assist in your assessment, we have put together the following digital estate planning checklist: 

1. Online purchases of digital products

This is the online equivalent of your DVD and CD collection. These assets may include music or film purchases on platforms such as iTunes or Prime Video.

They can also include non-fungible tokens (NFTs), which are unique digital items that are often artwork stored in a blockchain.

NFTs can also generate income through royalties, so specifying their ownership in a digital asset plan is crucial. 

2. Digital finance assets

When considering digital assets in a will, digital banking and financial assets should be a priority.

Banks such as Monzo are online only, so sharing access in your digital estate plan is necessary.

The same goes for credit cards, insurance policies and savings and investment accounts.  

Don’t forget to include any cryptocurrency access information and logins. 

3. Personal digital content and memories 

Many of our photo albums are now online, and years of memories could be lost if we delete our social media accounts.

Facebook and Instagram allow you to nominate someone to handle your legacy account should the worst happen.

However, others like LinkedIn, bank accounts and email providers will require login details.

Essentially, ensuring that access to online platforms is passed on through good digital asset planning will help things run smoothly. 

4. Digital devices

Physical digital devices such as your smartphone, tablet, laptop and smartwatch will hold digital assets within them and provide access to cloud accounts.

As with other digital assets, securely handing over login details and passwords is the key to avoiding later complications. 

How to create a digital estate plan

By now, you’re probably thinking: ‘How do I start my digital asset planning?’ 

Here's the steps to take to create a success digital estate plan:

1. Take an inventory

Take an inventory of your digital assets and anything you think might need to be dealt with after you’re gone.

This can include email accounts, online banking accounts, social media, cloud storage and loyalty card accounts.

If you own a website or blog, consider domain and platform logins. 

2. Store login details securely

Store all login details securely, as they are the key to your digital life and security.

A password storage tool will enable you to store all access data under a single login.

Apple Keychain can do this; however, remember to pass on your iCloud login details.

Other password storage tools include Dashlane and LastPass.

3. Choose an executor or power of attorney

Choose a digital executor and specify who this is in your will.

It may be the same as the person who has power of attorney for the rest of your estate, however, bear in mind that this person will need to have some awareness of digital and social media to execute your wishes.

4. Seek financial advice

Discuss your digital asset plan with a legal representative or financial adviser.  

A financial expert can help with digital estate planning by identifying your digital assets, advising on how to protect them, and ensuring they're included in your overall estate plan, making it easier for loved ones to access and manage them after your death.

What are the consequences of not having a digital estate plan? 

As a consequence of not having a plan in place, there is the potential for confusion among friends and family, disputes over ownership, and even legal issues regarding who has the right to access assets.

Unbiased can quickly connect you to a financial adviser who can help you with estate planning.