Estate planning is essential to prepare for any eventuality. It ensures that, no matter what happens, the elements of your estate (all the stuff you own that has monetary value) are managed the way you want them to be. This includes digital assets, virtual items (that cannot be accessed by physical means) such as tokens, cryptocurrencies, and digital accounts like social media handles, websites, web domains, etc. Estate planning for digital assets is just as important as physical assets; without a plan, these assets may end up in the wrong hands or become inaccessible due to a lack of access to information.
Why should you add digital assets to your estate plans?
Unlike physical assets like properties, collectibles, cash, etc., digital assets cannot be touched or stored physically, this makes it easy for them to fall within the crack while you are planning your financial life. About 25% of bitcoin in circulation is lost due to owners' death and because most are not store with regulated organizations that required to return all unclaimed assets to government agencies, they are likely to never be discovered by your loved ones.
In this guide, we will discuss how to add digital assets to your estate plan and how to execute the plan for these assets.
1. Identify all digital assets:
The first step in estate planning for digital assets is to identify all of the digital assets you own. This includes tokens,
- Cryptocurrency wallets
- Social media accounts,
- Online store accounts,
- Web domains
- Fractionalized real estate
- Domain names you own
- Digital stocks
- Valuable email accounts
- and any other digitalized items of value you own
- Digital files like photographs and videos
- Digital gold, silver, and even digital currencies
Once you have identified all your digital assets, making a detailed list of them and their associated information is essential.
2. Make a list of all digital assets: Make a detailed list of all digital assets and their associated information, such as account usernames and passwords, wallet addresses, etc. This should include account usernames and passwords, wallet addresses, and detailed instructions on accessing them in your absence.
3. Create a plan for each digital asset: Create a plan outlining how the asset should be managed after your death or incapacitation (e.g., who will have access to the asset, what should be done with the asset).
4. Document everything: Create a document containing all the information outlined in steps 1-3 and store it securely. This is where Cova's Vault feature comes in. Then, securely store the documents in your Cova Vault.
5. Update and track regularly: Keeping the documents created and your list of assets updated at all times is essential. However, having a list is not enough; document the value of each asset and update it at least once a month. With Cova, you can track the value of all your assets in real team and across multiple asset classes and currencies.
Now, what next?
Once you have created an estate plan for your digital assets, it is crucial to execute the plan to ensure that these assets are adequately managed after your death or incapacitation. The first step is to create an online account with a reputable service and upload your estate plan document. This will make it easier to manage your digital assets and keep them organized.
Once the document has been uploaded, it is crucial to add all your digital assets to the online account so they can be managed more easily. It is also essential to share the login information for the online account with someone you trust so they can access the estate plan in case of an emergency. Finally, update the online account whenever changes are made to your estate plan. Cova's Lifeche check feature lets you set a simple dead-man switch based. Lifecheck will check on you on preset days, and once you stop being active and responsive, it will share your documents and financial data with your preferred recipient.