Digital assets are an important part of our everyday life. We have personal accounts like email, banking, social media, and cloud-based storage as well as business accounts like websites and blogs. These assets include pretty much anything we access online or using a computer.
If we want to ensure our loved ones have access to these assets, we need to account for them within our estate plan.
How do we account for digital assets in our estate plan?
The first step is to make a list. Some assets may only require we share the username and password to move forward with a transfer, others, like cryptocurrency, may require more detailed records to ensure the asset transfers according to our wishes.
Unfortunately, transferring these assets often takes more than a byline in our will. Those who use blockchain technology, for example, need to provide the beneficiary with the key or the asset is essentially lost. However, as noted in a recent publication by U.S. News, simply giving out the key goes against the whole cryptocurrency culture. Supporters of crypto point to its status as a self-sovereign asset as one of its primary benefits. The thought of sharing this key will likely give the crypto holder pause, as it should. Let’s say the owner of crypto transfers the estate through a will. Putting the key, which is essentially a series of numbers, in the will is risky because the will itself generally becomes public during the probate process. This puts the crypto at increased risk of theft. It is important to use other legal strategies to safely transfer this asset while maintaining that self-sovereign status.
The transfer of these assets is only the beginning. A forward-thinking estate plan can also include additional considerations like the tax implications of the transfer.