How to Create a Digital Estate Plan: Your Comprehensive Checklist

You probably spend more time online than you realize. Between email, social media, online banking, and countless other digital accounts, so much of our daily lives occur in the virtual world these days. But have you stopped to consider what happens to that vast collection of digital property after you’re gone?

Too often, people put a lot of effort into traditional estate planning, such as wills and trusts, yet neglect the digital components of their legacy. And when there’s no clear plan in place, grieving loved ones can find themselves locked out of online memories and assets—or worse, watching those possessions disappear, potentially lost forever.

At Marx Law Firm, digital estate planning is a core part of preparing our clients for the future. We recognize that in the 21st century, your comprehensive estate plan isn’t truly complete until you’ve taken inventory of digital assets and documented your wishes around how they should be managed and distributed.

Why You Need a Digital Estate Plan

Digital assets encompass far more than just your email and social media logins. We’re talking about any files, data, or accounts with monetary or sentimental value that exist solely in digital formats, including:

• Usernames/passwords for online banking and financial accounts
• Personally or professionally authored digital media (videos, writing, websites, etc.)
• Digital wallets containing cryptocurrency like Bitcoin
• Valuable domain names, digital creative works like NFTs, online businesses
• Digitally-stored personal records, photos, videos, voicemails, messages

Most people already understand the need to plan for physical, tangible assets like real estate holdings, vehicles, and family heirlooms through traditional estate documents. But without specific provisions addressing your virtual belongings, there’s a huge risk of those digital properties becoming inaccessible or vanishing after you pass away.

Loved ones can be legally barred from accessing accounts without proper authorization – even mundane email archives you’d want preserved. Without clear instructions for handling cryptocurrency keys and other sensitive digital data, those assets could be permanently orphaned.

What Qualifies as a Digital Asset?

At the most basic level, any online account with login credentials and a potentially valuable payload of data qualifies as a digital possession – including email accounts, social media profiles, cloud storage services, websites/blogs, and digital subscriptions.

But digital assets certainly aren’t limited to just account access. Other examples of digital property that may need management could include:

• Digitally-stored personal records, documentation, and creative works (written, audio, video, etc.)
• Monetary assets like funds in online banking, payment processor, or investment accounts
• Intellectual property, personal domain name holdings, NFTs, and other digital creative works
• Cryptocurrency private keys granting access to crypto wallets
• Usernames and account data for online games, profiles, communities, and virtual worlds
• Digitally-licensed assets like software, e-books, media files

If it exists in a virtual format and holds value (whether financial or just sentimental), it likely qualifies as a digital asset worth including in your estate plan.

The Digital Estate Planning Checklist

So now that we understand the importance – and expansive scope – of protecting your online possessions, what concrete steps can you take to get your digital affairs in order? Here’s a checklist we recommend:

Make an Inventory of All Digital Assets

The first step is taking stock of your entire digital footprint. From online banking logins to e-book collections, make a detailed list covering all digital accounts and assets you currently own or manage.

For each, be sure to include:

• The name of the website/service/institution
• All usernames, PINs, passwords, and security answer credentials
• Notes on where digital files/records/assets are stored
• Any additional access info like multi-factor authentication details

A secure password manager app like 1Password or LastPass can streamline this inventory process greatly. These tools let you document all login details in an encrypted place while allowing secure sharing with designated individuals later.

Just avoid the temptation of saving all this sensitive data in something like a Word doc or basic spreadsheet!

Designate a Digital Executor

With your digital property cataloged, the next logical step is choosing who you want to grant legal authority to access and manage those assets after your incapacitation or death. This is your “digital executor.”

In some states like Texas, you can designate a separate digital executor for handling your virtual possessions. This individual would work alongside the executor in your will to fulfill your final digital wishes.

In other states, the traditional executor named in your will would have legal authority over physical and digital assets – unless you specify certain accounts or properties to be managed separately.

Document Wishes for Digital Assets

With your digital assets identified and an executor in place, you’ll need to clearly outline your specific wishes around how each account and possession should be handled after you pass away.

This directive allows you to:

• Stipulate which accounts, if any, should be permanently deleted or memorialized
• Identify any files, records, or other data in online storage you want backed up for preservation
• Designate who should receive access or ownership of valuable digital property like domains, creative works, crypto wallets, etc.
• Note any login credentials needing to be changed or accounts requiring cancellation

Be as comprehensive and explicit as possible here. The more details you provide on handling each asset individually, the smoother the transition will be for your executor in carrying out your exact wishes.

Follow Laws on Digital Asset Access

In Texas, the state has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which sets guidelines for fiduciary powers over digital property during incapacitation or after someone’s passing.

Some key provisions of this 2017 Texas law:

• Executors must be granted explicit approval through estate documents or online tools to access digital assets
• Service providers like Google, Apple, Facebook, etc., must comply with valid disclosure requests
• Default privacy settings will still protect an account’s contents from inappropriate disclosure

So, to ensure your digital executors and loved ones have a legal pathway to properly handling your virtual property as intended, you’ll need to incorporate RUFADAA-compliant provisions into your will, trust, or other estate planning paperwork.

Review and Update Regularly

Here’s the thing about our modern digital lives – they’re in a perpetual state of evolution. You’re constantly creating new accounts, accumulating data, and allowing different apps, services, and platforms into your virtual world.

That means a one-and-done approach to digital estate planning simply won’t cut it. At the very least, you should get in the habit of revisiting your digital executor paperwork and online account permissions annually. Reassess what’s changed, update details accordingly, and communicate adjustments to anyone needing to stay informed.

And certainly, always remember to update everything after major life events like:

• Getting married/divorces
• Birth of a new child
• Opening or closing new major accounts or digital wallets
• Starting new digital ventures like websites or e-commerce stores
• Children reaching legal age to begin receiving inheritance

The more you treat your digital estate plan as a living document, the better your chances of ensuring a smooth digital transition for loved ones when the time eventually comes.

Working with a Digital Estate Planning Attorney

At Marx Law Firm, we’re intimately familiar not just with traditional will and trust documents but also with all the evolving laws and regulations governing digital property rights. We stay current on statutes like RUFADAA, have working knowledge of common online platform policies, and are well-versed in best practices around cybersecurity and digital custodianship.

Our attorneys integrate digital asset preservation and distribution directives into your overall estate plan while adhering to your specific wishes and family dynamics. So, if you’re hoping to protect your loved ones’ online legacy, working with our firm is the wise choice.

Ready to cross your digital assets off your estate planning checklist? Contact Marx Law Firm today to schedule an initial consultation.