The White House reports that 16% of adult Americans have purchased digital assets. Social media platforms such as Facebook have begun to acknowledge the reputational and sometimes financial afterlife of popular accounts by offering content creators options for designating legacy account holders who will have access to account management in the event of the creator’s death or disability.
Meanwhile, the emergence of cryptocurrency investments and NFT collectibles underscores the importance of digital assets estate planning for a new generation of technophile investors. Experienced financial advisors understand that failing to account for digital assets could leave a significant portion of an estate vulnerable. If you need assistance with your digital assets estate planning, consider contacting The Law Office of Jason Carr at (214) 800-2366 to request a free initial consultation.
What Are Digital Assets?
Digital assets refer to electronic records, files, and other intangible property that is stored online, on mobile devices, on the cloud, or on electronic devices. Some digital assets include the records of financial assets that would otherwise be disposed of as part of your will while others are the individual asset, such as NFTs, software code, or other forms of intellectual property.
Some examples of digital assets that many people own include:
- Accounts for Bitcoin, ether, and other cryptocurrencies (though the underlying asset would be part of the regular estate)
- Email accounts
- Social media accounts
- Online banking accounts
- Marketplace accounts
- Digital photos and videos and accounts that store them
- Online accounts that monetize your content
- Blog content
- Subscription accounts online
- Online shopping accounts
- Loyalty programs
- Non-fungible tokens
- Website domain names
- Digital rights to artistic creations, such as literary or music works
- Online utility accounts
- Gaming accounts and gaming purchases
Why Do I Have To Worry About Digital Assets?
People create estate plans so they can have peace of mind and protect their families. The same rationale applies regardless of the form those assets take Through digital assets estate planning, you can protect your family by:
- Ensuring they have access to all digital assets that have monetary value
- Avoiding confusion regarding the digital assets
- Preventing loved ones from receiving disturbing notifications after your death
- Providing your loved ones and executors with information they may need, such as how to access online financial accounts
- Protecting friends and family from information that may be embarrassing to them
- Preventing identity theft after your death
- Ensuring the people you choose have access to your digital assets after your death
- Avoiding the stress of not knowing what to do with digital assets
Just as with any other form of estate planning, digital assets estate planning can be a complicated process that involves careful consideration of many factors and careful wording of estate documents. To facilitate your digital assets estate planning process in Texas, you may wish to consider reaching out to an experienced estate planning attorney at the Law Office of Jason Carr.
Should You Include Digital Assets in a Last Will and Testament?
One may reference the digital assets in your Last Will and Testament, but one should not generally include identifying information about them. A will is a public record. Therefore, any information included in it can be accessed by anyone who sees the content of the will.
One option an individual may choose to use is to reference a memorandum in their will. The memorandum would include a list of all digital assets and information on how the individual would want the estate executor to handle them. To be legally binding, the memorandum would have to comply with the legal formalities for execution of a valid Last Will and Testament as described under Texas law, including that the will must be written, signed, and properly attested.
How Do You Protect Digital Assets in Estate Planning?
You can help to protect your digital assets by creating a plan specific to them. This process may involve the following:
Creating A List
The first step is to account for the estate’s digital assets. Consider all of the activities you conduct online to help identify all digital assets and where they are stored. Create a list of the following information about each asset:
- The type of asset
- A description of the asset
- Username to access the asset
- Password associated with each account
- Answers to security questions
Bear in mind that any document containing this kind of login information should be stored securely. Individuals may also wish to consider storing username information separately from the associated passwords.
Selecting A Digital Executor
A digital executor is someone named in the estate planning documents who will carry out a decedent’s final wishes concerning their online accounts. An individual can provide the digital executor with access to their accounts, login information, passwords, and directions. The digital executor may be the same person an individual names as the executor of their Last Will and Testament, but it is also possible to name someone else to carry out the digital portion of the overall estate plan.
Knowing the Options
The options an individual has for the disposition of their digital assets will be affected by the terms of service for the various digital assets they have accumulated. For example, with social media accounts, the following options are commonly encountered:
- Deleting an account
- Memorializing an account
- Nominating a legacy contact
Depending on the account, the person an individual chooses as digital executor may have to provide additional information to the platform, such as the user’s name, login information, date of birth, and date of death.
Some platforms, such as Twitter, may require the digital executor to fill out a form that shows they are authorized to take certain action on a decedent’s account. Additionally, some online platforms do not maintain administrative access to users’ accounts. In those situations, the digital executor may need to personally access the decedent’s account to delete it.
Setting Up A Password Manager
One way to streamline the process for a digital executor is to use a password storage or manager tool. This can help avoid needing a separate password and login information for each account, speeding up time and simplifying the process.
Once an individual has thoroughly reviewed all of their digital assets and the options available for managing them as part of an estate plan, the account owner can begin determining how each digital assets should be handled after their death. Some of the options may be:
- Deleting the account
- Saving information or accounts
- Allocating assets to loved ones
- Sharing access to online photos and videos
- Investing income-generating assets
- Selling off inventory on a marketplace account
- Continuing to operate a business
Making The Plan Legal
While putting one’s wishes in writing is a great first step, an important part of digital assets estate planning is to ensure the estate plan will be legally-binding. An experienced estate planning lawyer may be able to explain how you can make the digital estate plan legally enforceable and how you can integrate your digital legacy within your total estate plan.
Contact an Estate Planning Lawyer for Help
If you have digital assets and want to know more about your options or would like to create a plan for them, consider contacting a knowledgeable estate planning lawyer from The Law Office of Jason Carr. We can review your individual circumstances and provide you with information regarding your legal options and rights concerning digital assets estate planning. You can reach us by calling (214) 800-2366.