How to protect online, digital assets and include them in your estate?

I am a 45-year-old man from Mumbai. I am in the process of planning my estate. I also want to protect my online and digital assets and include them in my estate for my family to inherit them. How do I identify and protect my digital assets? 

—Name withheld on request

Digital assets include any online accounts or digital files that hold value or significance. These can be broadly categorized as:

• Financial assets: Cryptocurrency, online trading accounts, digital wallets (Paytm, PhonePe, Google Pay), online banking credentials.
• Personal assets: Emails, photos, videos, cloud storage (Google Drive, Dropbox), blogs, digital journals.
• Social media accounts: Facebook, Instagram, Twitter, LinkedIn, YouTube.
• Business assets: E-commerce platforms, digital intellectual property such as domain names, and websites.

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Many digital assets carry real financial worth. Ignoring them can create serious challenges for your heirs. Unclaimed cryptocurrency or wallet balances may be lost forever. Inactive digital profiles are vulnerable to hacking and misuse and, in the absence of explicit directives, heirs may face difficulties accessing or managing these accounts.

India currently lacks specific legislation governing digital asset succession. This makes it crucial to take proactive steps within the existing legal framework:

• Information Technology Act, 2000: Offers general guidance on data protection, but doesn't address inheritance rights.
• Indian Succession Act, 1925: Covers movable and immovable property, but not explicitly digital assets.
• Terms of Service Agreements: Each platform (e.g., Google, Facebook) has its own rules for account management after death.

Here’s how you can ensure your digital legacy is preserved and properly managed:

Create a digital asset inventory

Identify and document all of your digital assets. This documentation should include the following details: asset type, account names and associated platforms, usernames, purpose or value of each asset, related devices or methods of storage, as well as the corresponding login identifiers and passwords. 

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Appoint an executor specifically for digital assets

It is advisable to appoint an individual distinct from the primary executor to serve as a digital executor. This designated person will be responsible for the management and execution of the testator's wishes regarding digital assets. It is essential to delineate the scope of access granted to the digital executor and to provide explicit guidelines on the management of each category of digital asset.

Include digital assets in your will

When preparing a will or trust deed, it is imperative to explicitly address digital assets to ensure their recognition as part of the testator's estate and to facilitate their management in accordance with the testator's intentions. Although Indian succession law does not currently provide specific provisions for digital property, incorporating a comprehensive clause can mitigate ambiguity and promote a more efficient administration process.

Use trusts for high-value digital assets

If you possess significant digital assets, such as cryptocurrency, contemplate establishing a trust to facilitate a controlled and confidential transfer of these assets. This approach can facilitate a controlled and confidential transfer of these assets, ensuring proper management and protection of wealth.

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Estate planning for digital assets in India is an emerging field, but proactive individuals can successfully address potential gaps by taking thoughtful and legally sound measures. As our digital footprints expand, the importance of safeguarding them—both during our lives and after—becomes increasingly significant. Consult with a qualified estate planning attorney to ensure that your wishes are fulfilled and your digital legacy is preserved.

Aditya Chopra is managing partner, and Moxy Shah, associate, The Victoriam Legalis