In our increasingly digital world, the average person is reported to have over 25 discrete online logins, a number that is probably vastly understated, especially for wealthy investors. In addition, electronic commerce is an increasing source of livelihood and wealth. Yet many individuals don't fully comprehend the breadth and complexity of the assets and information they hold online, or how these assets will be handled after their death.

Current law is rapidly changing in order to address the realities of digital asset management and disposition. Individuals need to be continually tracking their digital assets and reviewing their estate plans to ensure they are aligned with their wishes and current laws.


Understand What Constitutes a "Digital Asset"

The definition is constantly changing, but generally includes any electronic data and documents, user accounts for devices or online services, virtual or digital currency such as Bitcoin or even frequent flyer miles, domain names for websites you own, and any intellectual property rights you hold.


Balance Security With Accessibility

While it's important to protect your digital assets from fraud and invasions of privacy, it's also important to ensure that your family or fiduciary can access them after you pass. Achieving both of these goals can be challenging, especially given the murky legal and regulatory terrain surrounding these relatively new types of assets.


Recognize the Risks of Failing to Plan Ahead

Failing to plan ahead not only creates more work for your fiduciary, it also increases the risk of your assets going missing or degrading to a point where they can't be accessed at all. Additionally, the longer it takes your fiduciary to gain access and control of your assets, the more opportunity there is for identity theft or other breaches of cybersecurity.

“It can be nearly impossible to completely and correctly identify all digital assets without the owner's very thorough organization and communication in advance.”

While the definition of digital assets continues to evolve, some common types include:

No Plan is Complete Without Thoughtfully Accounting for Digital Assets
Create an inventory

Look beyond the obvious as you catalog your financial accounts and passwords; personal digital records and mementos; passwords and guidelines for accessing all personal devices and password-protected documents; business and enterprise assets; and more. Options as to where and how to store this inventory may vary, person to person.

Leave behind explicit instructions

Explicit written permission as to your fiduciary's authority to access (or not access) your digital assets should be made in your estate planning documents or in a separate written document. These instructions should include how to access, administer, transfer and even potentially destroy records. However, detailed instructions or private information should not be disclosed in a will or other public document.

Stay informed, or ensure your advisors do

The protection of digital assets is one of the fastest changing and most complex areas of wealth planning today. Staying on top of changes in this area and how they could impact you or your heirs is of paramount importance.

  • Disclosure

    This material is the property of The Bank of New York Mellon Corporation, its subsidiaries and affiliates (collectively, “BNY Mellon"). This material, either in whole or in part, must not be reproduced or disclosed to others or used for purposes other than that for which it has been supplied without the prior written permission of BNY Mellon. This material is provided for illustrative/educational purposes only. This material is not intended to constitute legal, tax, investment or financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. BNY Mellon Wealth Management, Advisory Services, Inc. is registered as a portfolio manager and exempt market dealer in each province of Canada, and is registered as an investment fund manager in Ontario, Quebec, and Newfoundland & Labrador. Its principal regulator is the Ontario Securities Commission and is subject to Canadian and provincial laws. Trademarks and logos belong to their respective owners. ©2017 The Bank of New York Mellon Corporation. All rights reserved.