Incorporating Digital Assets in Your Comprehensive Estate Plan
Many individuals first thought when they hear “digital asset” is that this really doesn’t apply to me. In reality, most people have a pretty broad and robust digital life that does need to be integrated into their estate plan.
What Assets are Considered Digital?
Under Michigan’s Fiduciary Acess to Digial Assets ACT (FADAA) a digital asset is defined as “an electronic record in which a user has a right or interest.” The definition specifically does not include an underlying asset or liability unless the asset or liability is itself an electronic record. This is a very broad definition and includes “content” like social media, cloud accounts, emails, and drop-box among other things.
How to Prepare Your Digital Assets
Preparing your digital assets is typically a two step process.
Step One - develop an inventory of your digital assets and let someone you trust know of the location of the list and what you would like to have done after your passing. The list should include essentially all information needed to access the account and be kept up to date.
Step Two - you need to create or update your estate plan to allow a fiduciary access to your digital assets. This can be accomplished through 1) a trustee acting under a trust or 2) a fiduciary acting under will or power of attorney.
Without proper planning of the two steps listed above, gaining access to important family memories and other important digital assets can become very complicated and time consuming.
When to Involve an Estate Planning Attorney
If you have digital assets that will require management by loved ones after your passing, it is best to consult an experienced estate planning attorney. This important step will help to ensure a smooth transition to a designated personal representative.
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