Safeguard Your Digital Estate

As we step into 2025, we’re living firmly in the digital age and all that this name entails. For most of us, this means that our online records are just as essential, if not more so, than the physical copies we have filed away. Most official communication channels are digital, forms and legal documents are completed electronically, and many people’s banking is primarily online, possibly even extending to things like cryptocurrency wallets.

This is all without mentioning cloud storage or the public-facing aspects of our digital footprint like social media profiles. But what happens to all these assets when we can no longer manage them?

Enter the concept of a digital estate. Just as you would safeguard your home, car, and financial accounts, securing your digital assets is crucial; and in the same vein, there are steps that you can take on your own, with the help of a legal expert, and with the guidance of a financial professional.

What is a Digital Estate?

It is important to, first, clearly define what comprises your digital estate. Generally, it encompasses all the online accounts, digital files, and assets you’ve accumulated over the years.¹ This can include social media profiles, online banking and investment accounts, email, cloud storage, digital photos and videos, blogs, websites, and any other virtual property you own.

As you can probably tell, their value doesn’t have to be monetary – in fact, it is likely that the majority of your digital estate holds sentimental or operational value, such as family photos or business documents.

Regardless, neglecting to properly safeguard or make arrangements for any of these assets can lead to complications for your loved ones in the event of your death or incapacitation. They might struggle to access essential accounts, face challenges with social media companies, or they could be unaware of costly or valuable property in the first place.

By taking steps now to secure your digital estate, you can help ensure your wishes are respected and make the transition smoother for those you leave behind.

The Importance of Digital Estate Planning

Digital estate planning includes organizing your digital assets and specifying how they should be handled after your death – the “why” is similar in many ways to the importance of planning for your physical belongings.

From an emotional standpoint, having an established plan can help reduce stress for you now and relieve much of the burden from your loved ones in the future. There are also practical reasons that it is essential:

• Competent and effective organization can provide a full overview of your digital footprint, ensuring none of your assets fall through the cracks and providing an easy starting point for whoever is involved with handling your affairs.
• Without proper planning, your loved ones may lack the credentials or legal authority to access your accounts. This can result in locked accounts, lost data, and unresolved financial matters.
• Your digital estate may contain sensitive information that should not fall into the wrong hands. Planning helps ensure that your personal data remains secure and is only accessed by those you trust.
• Digital estate planning allows you to ensure that sentimental items, such as photos, videos, and personal messages, are preserved and passed on according to your wishes.
• If you own a business or have digital assets contributing to your income, planning ensures these assets can be managed or transferred without disruption.
• With your financial assets documented and accessible, your loved ones can work together with your financial professional to allocate monetary resources in correspondence with your expressed wishes and to secure the comfort of your spouse and any dependents you may leave behind.

How to Safeguard Your Digital Estate

Now that you understand the importance of digital estate planning, here’s how to get started:

• Take Inventory of Your Digital Assets

Begin by listing all your digital accounts, including social media profiles, email accounts, cloud storage, financial accounts, and any other online services you use. Don’t forget about subscriptions, digital currencies, and intellectual property like blogs or websites – your financial professional can help look through your spending to make sure you have a thorough inventory of all paid services that may incur automatic charges.

• Organize Your Digital Assets

Record important information such as usernames, passwords, security questions, and two-factor authentication details for each account. Consider using a secure password manager to keep track of this information safely. If you feel the need to record these credentials on a physical medium, i.e. a notebook or index cards, be sure that you store them in a secure location that can only be accessed by you and your loved ones.

• Designate a Digital Executor

As you would appoint an executor for your physical estate, choose a trusted individual to manage your digital assets. This person should be tech-savvy and aware of your wishes. Ensure they have the legal authority to act on your behalf, which may require specific legal documentation.

• Make Your Digital Estate Plan Official

Work with an attorney to incorporate your digital assets into your will or trust.² Your plan should specify how you want each asset handled, including whether it should be transferred to someone else, archived, or deleted. Ensure that your digital executor is aware of this plan and knows where to find it.

You may also consider verbally informing your personal financial professional about the basic structure of your estate plan. They don’t necessarily need the details, but knowing your ultimate financial desires, such as for a spouse or any dependents, could be helpful if they are engaged by your digital executor.

• Regularly Update Your Plan

Digital assets and passwords change over time, so it's important to review and update your digital estate plan regularly. Ensure that your inventory is current and that any new assets are included.

• Communicate Your Wishes

Have a conversation with your loved ones about your digital estate plan. While this might be uncomfortable, they must understand your wishes and know where to find the necessary information.

By organizing your digital assets, designating a trusted individual to manage them, and creating a comprehensive digital estate plan, you can ensure that your online legacy is handled according to your wishes.