Understanding Digital Real Estate and Its Role in Your Estate

So, what is digital real estate in the first place? We’ve mentioned that we define it as assets and properties that an individual owns digitally; now, let’s go into more depth about what that really means, so that you can recognize and protect your digital assets.  

Examples of Digital Real Estate

Digital real estate can include social media accounts and the content on each account, websites and domain names, online businesses or e-commerce stores, digital currencies and cryptocurrency wallets, cloud storage accounts and the files housed in each account, digital media libraries (photos, music, movies, e-books), online gaming accounts, virtual web3 assets, and intellectual property rights owned by digital creators. When reviewing this list, it’s easy to see how common digital real estate ownership is in this day and age! 

Keep in mind that different digital platforms for these assets come with different rules and regulations in an estate situation. We’d recommend checking out our article on which digital assets can be passed through your will, and consulting with an estate planning attorney for guidance. 

Value of Digital Assets

With the advent and widespread adoption of new digital technology over the past several decades, it has become easier and easier for individuals to keep valuable information and assets exclusively in a digital format. Identifying and protecting these assets in the case of an individual’s passing is incredibly impactful in several ways. Much of the content housed online, such as social media accounts, blogs, photos, emails, and more can serve as a preservation of an individual’s personal legacy, and often holds great sentimental value for loved ones. Additionally, many digital assets may have financial value, especially for business owners and those involved in digital currencies. Finally, protecting digital assets is an important step in maintaining data privacy, as it shields sensitive personal information from vulnerability. 

How to Write a Will That Includes Your Digital Real Estate Assets

Writing a will that includes your digital real estate assets takes time and focus, but is well worth the benefits of securing those assets for your future beneficiaries. We recommend completing the following steps to include your digital assets in your will:

1. Take a full inventory: Build a comprehensive list of all your digital real estate assets, from cloud storage to digital currencies and everything in between. 
2. Determine the value of your assets: Assess both the financial and sentimental value of each digital asset on your list. For some assets, this may require a professional valuation. Don’t skip this – it’s important for proper distribution of these assets. 
3. Choose your beneficiaries: Each digital asset you own will need to be allocated to a specific person (a beneficiary). When it comes to digital assets, consider how tech-savvy each beneficiary may be, and if they will be able to understand and manage the asset you leave to them.
4. Appoint your digital executor: As you choose your executor, consider their understanding of digital assets and technology to ensure that they can access and transfer your digital assets during the execution of your estate.
5. Compile access information: Your digital executor will need an updated resource for your assets that contains usernames, passwords, account recovery information, etc. Be sure to store this safely and securely and ensure your executor can access it. 
6. Detail clear instructions: Specify clearly how you want each asset to be managed by the executor and your beneficiaries. We also recommend including a clause in your will about any digital assets you may own in the future, so that your will keeps up with any unforeseen changes. 
7. Consult an expert for legal considerations: To ensure that your will is compliant with any and all laws that apply to your estate, we strongly recommend consulting with a will or trust attorney who is familiar with digital real estate assets. This is also a great time to ensure you adhere to the specific policies each digital platform may have for transferring assets after your passing.
8. Update your inventory and will regularly: Because technology evolves quickly and many people continue to build their digital inventory and acquire new digital real estate, frequent updates may be necessary to ensure your documentation of your digital portfolio remains accurate. 

Appointing a Digital Executor for Effective Digital Asset Management

You’ve likely heard of the importance of appointing an executor for your will…so what’s the difference between an executor and a digital executor? Generally, the answer to that question depends on your estate, assets, and situation. A traditional executor is tasked with managing your entire estate, from physical property and belongings to financial accounts and everything in between. The role of a digital executor, however, is to focus solely on managing and distributing your digital real estate assets. While the two roles may overlap (or, in some cases, be performed by entirely the same person), the primary difference lies in their expertise when it comes to navigating complex online processes and technological complications. 

What Does A Digital Executor Do?

Upon your passing, your digital executor will take the necessary steps to access each of your digital real estate assets using login information and account recovery processes. From there, they will carry out your wishes for each digital asset, ensuring that cloud files and photos are in the hands of your beneficiaries, online business assets are safely transferred to a successor, and cryptocurrencies and digital investments are cared for in the way you detailed in your will. It’s important to note here that a digital executor isn’t recognized by law everywhere yet, so we strongly recommend consulting with an estate planning attorney to ensure that your digital executor is able to receive the proper legal authority to act on your behalf when it comes to your digital assets. 

Working with Will Lawyers to Protect Your Digital Real Estate

Creating a will often offers significant peace of mind, both to the individual creating the will and to their loved ones. One impactful way to magnify that peace of mind is to consult a will lawyer when planning your estate, especially if you have digital real estate assets to consider. Aside from providing guidance that makes the will creation process less daunting and more manageable, will lawyers bring with them a slew of benefits:

• Legal expertise: Because estate laws are often complicated and vary from state to state, it’s important to work with someone who can ensure that your will is legally valid and keeps up with current legal requirements (especially digital asset laws, which change rapidly). For additional context, check out this information from the American Bar Association about digital asset laws. 

• Tax strategy: The execution of an estate can often come with significant tax consequences for your beneficiaries, and a will lawyer can often protect against unnecessary estate taxes by advising on tax strategy or pointing you to other trusted professionals. 

• Comprehensive inventory: Compiling a complete list of your assets, both physical and digital, can prove to be quite an undertaking when navigated alone. A will professional can help you to ensure that no asset gets overlooked or forgotten in your planning process. 

By helping you compile a comprehensive inventory, adhere to shifting digital asset laws and other legal considerations, comply with the terms of service for each digital asset platform, and keep your will current, a will lawyer ensures that your digital assets are securely passed on to your trusted family and friends. 

Ensuring Your Beneficiary Receives Your Digital Legacy Safely

Now, you’ve taken into consideration who to choose as your executor and which legal professionals to consult, it’s time to make decisions about a third party: your beneficiaries. Designating a beneficiary for each of your digital assets requires considering many of the same variables as choosing an executor. Aside from choosing someone whom you wish to have the asset, you should ponder on the level of trust you have with that individual and whether they are comfortable with technology/capable of managing the digital asset you leave them. Think about the effect the asset will have on them and the sentimental value they may place on it. Be aware that in some situations, it may be appropriate and advised to have bridge or backup options, such as adults who manage a digital asset until a minor beneficiary comes of age, or alternative beneficiaries for those who may choose not to accept a specific asset. 

It can prove highly beneficial to consult a legal professional as you designate your beneficiaries, as they can help you proactively plan for potential conflicts or special considerations in your unique situation. 

These guides may be of benefit to you too:

• Learn How you can Notarize your Will Remotely

• How to Choose the Right Executor for Your Will

• How to Pass a Will Through Probate

• How To Choose The Right Guardian For your Child

Conclusion

In this modern digital age, planning for digital real estate in your will is an aspect of estate planning that can’t be missed. Over the course of your life, the value and significance of your online assets will only grow, both financially and sentimentally. By being clear and specific about your inventory of digital real estate assets and your wishes for each, you secure their safe and effective transfer to your loved ones. Additionally, as you consult with legal experts throughout the process, you take proactive steps to protecting your digital legacy and keeping your valuable personal information safe. 

Taking action toward developing a comprehensive will (one that includes your digital real estate assets) can create future peace of mind and ease the burden on your loved ones down the line. We encourage you to take advantage of the resources at your disposal, many of which we’ve proudly developed for your benefit. Take advantage of our online will creation service, notary services, and free changes for life (to make it easier to keep up with your evolving digital assets). Start securing your digital legacy today!

FAQs

1. What is Digital Real Estate and Why Should It Be in My Will? a: We define digital real estate as valuable online assets and properties that an individual owns digitally, and it exists in nearly everyone’s lives. It can include social media accounts and their content, websites and domain names, online businesses or e-commerce stores, digital currencies and cryptocurrency wallets, cloud storage accounts and the files housed in each account, digital media libraries, online gaming accounts, virtual web3 assets, and intellectual property. 
   
   
2. Do I Need a Digital Executor for My Digital Assets?
   a: Yes! A digital executor will possess the technological capability to manage the access and distribution of your digital real estate assets. This can sometimes be the same person as your traditional executor, but it’s highly advised to select someone trusted who can manage your specific digital assets. 
   
   
3. How Can Will and Trust Attorneys Assist with Digital Real Estate?
   a: Legal professionals like will and trust attorneys can help you compile a comprehensive inventory, adhere to shifting digital asset laws and other legal considerations, comply with the terms of service for each digital asset platform, and keep your will current.
   
   
   

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