Digital estate planning: How to create your digital legacy in 5 steps

So much of your daily life exists in a virtual world. You send email, interact on social media, and stream your favorite tv shows on a regular basis. And each of these actions is tied to a digital or electronic account — known as your digital assets.

But what happens to your digital assets if something happens to you?

The average person under age 70 has 160 digital accounts to their name. With so much of our lives now taking place online, it’s important to make sure your digital assets are protected when you pass away or if you become unable to manage them yourself. This is where a digital estate plan comes into play.

What is a digital estate plan and why is it important?

The collection of all your digital assets is called your digital estate. You can protect your digital estate by having a digital estate plan. Much like a last will and testament, a digital estate plan is a document that details each asset in your digital estate and provides instructions for what you want to happen to them when you pass away.

There are many advantages to having a digital estate plan. By planning ahead, you can:

• Prevent your digital assets from being mismanaged after you die.
• Protect your digital assets from hackers or fraud.
• Provide your loved ones with a comprehensive list of your digital assets and accounts, instructions for how to access them, and a roadmap for what you want to happen to each account.
• Save your loved ones time and hassle of hunting down all of your accounts (which could take weeks, months, or even years, depending on how many digital accounts you have).

Most states have adopted the Uniform Fiduciary Access to Digital Assets Act, which gives your personal representative (like your executor, trustee, or estate attorney) access to your digital assets if you become incapacitated or pass away. But this law doesn’t determine what should be done with these accounts. By having a digital estate plan, you can provide detailed instructions on how you want each digital asset handled.

Common digital assets

Any digital file or online account is considered a digital asset. Some of the most common types of digital assets you may have include:

• Email accounts (like Gmail or Yahoo)
• Social media accounts (like Facebook, Instagram, or LinkedIn)
• Bill pay accounts (like your utilities, internet, or mortgage accounts)
• Online financial accounts (like banking, brokerage, and cryptocurrency accounts)
• Income-generating assets (like a blog or website)
• Online storage accounts (like Dropbox or iCloud)
• Credit card points (like cash back rewards or frequent flier miles)
• Digital files (like photos, videos, or documents)
• Movie or music streaming services (like Netflix, Hulu, Spotify, or Apple Music)
• Subscription services (like Amazon Prime)
• Logins for member or rewards programs (like for your favorite stores or websites)

Depending on your situation, interests, or preferences, you could also have other types of digital accounts. For example, if you have a side job selling homemade crafts, you may have an online shop through a selling platform, like Etsy or Shopify.

How to create your digital estate plan

You can create a digital estate plan of your own in five simple steps:

1. Inventory your digital assets

Before you make your digital estate plan, it’s important to take stock of your digital accounts. Creating an inventory of every digital asset you have will help you decide what should happen to each when you pass away. It will also spare your loved ones the headache of tracking down all of your virtual accounts.

Your inventory list should include:

• The website or platform name
• Your login details, including username and password
• The type of account (like email, banking, social media, etc)
• Any other important information (like security questions, or whether the account requires two-factor authentication)

With so many digital accounts to remember, it may take time to list all of your digital assets — and that’s okay! It’s better to spend extra time to remember and document everything now, than to realize you’ve forgotten some accounts later.

When it comes to documenting your accounts, you have a few options. You could keep a handwritten list. You can also store your account information in an encrypted digital vault or use a password manager, like LastPass or 1Password. Most of these resources let you grant emergency access to someone if something should happen to you, like if you become incapacitated (meaning you’re unable to manage your assets yourself) or if you pass away.  

2. Decide the future of each asset

Once you’ve listed out all of your digital assets, you’ll need to decide what you want to happen to each one. This could include:

• Closing or memorializing accounts
• Sharing account information with specific people
• Downloading or saving files to a specific location, like a thumb drive or Cloud account

Some assets serve double duty as both a physical and digital asset. For example, say you have a checking account at your local bank. This can be both a physical asset (the money held in the account) and a digital asset (your online banking credentials).

In this case, you should list the financial asset in your will. Then you would include your online bank account details in your digital estate plan and instruct that this asset be handled according to your will. This makes it easier for your executor to find these accounts after you pass away, and it simplifies the process of transferring these assets to your beneficiaries.

3. Choose a digital executor

A will executor is someone you name to manage your estate and distribute your physical and financial property according to your last will and testament after you pass away. A digital executor is the person you name in your will to manage your digital property after you pass away.

While your will executor and your digital executor can be the same person, they don’t have to be. If your will executor isn’t comfortable managing digital assets or you simply want to ease their workload when managing your estate, you can choose someone else to oversee your digital property.

If you decide to name a separate digital executor, you need to name them in your will and explain where they can find your digital estate plan.

Your digital executor’s duties may include:

• Closing or deleting accounts
• Archiving accounts or information
• Saving digital files (like pictures or videos) to specific places

If your digital estate plan includes instructions for sharing certain assets or account information with specific people, your digital executor would also be in charge of making sure these wishes are followed.

4. Note your digital estate plan in your will

Most states have laws that allow your executor to access your digital assets after you pass away. As a result, only a few states recognize a digital estate plan as a standalone legal document.

Despite this, it’s still a good idea to create a digital estate plan alongside your will. It’s helpful for your executor to have a list of all the accounts you own, instead of having to track each of them down and request access individually.

Once your digital estate plan is complete, you should note the following in your will:

• That your digital estate plan exists
• Where your digital estate plan is stored
• Who your chosen digital executor is

While it may seem easier to include your digital wishes directly in your will, this isn’t recommended. During probate (the court-supervised process of distributing your assets according to your will), everything in your will becomes public record. This includes what assets you own and who your beneficiaries are.

If you include the details of your digital estate in your will, this information would also become public — including your usernames, passwords, and other sensitive information. That’s why it’s best to keep this information in a separate, private document.

5. Store it in a safe place

Once you’ve completed your digital estate plan, you’ll want to store it in a safe place.

If you created a physical document with your digital wishes, you can store it with your other estate planning paperwork (like your will, trust, or power of attorney documents).

You’ll want to store your physical documents in a safe place, like:

• With a trusted loved one
• With your estate attorney
• In a fireproof safe
• In a safe deposit box
• With your local probate court

If you use a digital vault or password manager, you can include access instructions for your digital executor in your will. Depending on the specific vault or manager you use, you may also be able to grant your digital executor access directly through the platform.

For example, some password managers have an “emergency access” feature. This feature lets you choose an emergency contact who can request access to your account in an emergency.

Make your digital assets part of your estate plan

Having an estate plan is an essential part of preparing for the future. During the estate planning process, you decide what should happen to each of your assets when you pass away — including your digital accounts. A digital estate plan helps you ensure your digital property is handled according to your wishes. It also makes the process of finding, transferring, and closing accounts much easier for your loved ones.

Remember, a digital estate plan only covers your digital assets. That’s why you still need a last will and testament to explain what should happen to your property after you die. In it, you can include information about where to find your digital estate plan and who should manage it.

With FreeWill’s free will-making tool, you can create your will in as little as 20 minutes — that’s less time than most people spend scrolling through their social media accounts each day! Our tool makes it easy to nominate a digital executor and leave them instructions about how to access your digital estate plan, completely for free.