Passing your digital assets to your beneficiaries requires having a digital estate plan. Without it, they may not be able to access the things you want them to have. The plan also needs to have a digital executor named, or it could be the executor of your will.
Your loved ones will likely want access to things in your digital estate that mean much to them. It can especially mean family pictures, accounts with money, credit card points, business information, and more.
Digital assets is a rather broad term that includes almost anything in digital form you created or online accounts you have. LegalZoom mentions that the assets include the electronic equipment that holds the data. It includes computers, tablets, flash drives, external hard drives, digital cameras, and e-readers.
A Definition of Digital Assets
Technically, the Internal Revenue Service (IRS) defines digital assets as any digitized information having specific ownership and stored on an encrypted distributed ledger—i.e., blockchain technology. Although digital assets such as cryptocurrency or virtual currency are not real money, they can have an equivalent value that can be a substitute for some purchases.The Digital Asset Plan
Findlaw mentions that a digital will (or asset plan) consists of an inventory of your digital assets and information on how to access them. When your digital estate plan is separate from a traditional will, it does not carry as much weight as a will. It is simply a document listing your digital assets, where to find them, and how to access them. It is not an enforceable document.In some cases, it may not be possible for anyone to access those accounts except for the original account owner. In those situations, there may not even be any way to legally gain access to them.
The USBank reveals that some states have created a document (or an equivalent one) called the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which governs what happens to digital assets after the owner dies. The document called for a three-tiered system governing the type of access that beneficiaries or family members can be granted. The three tiers are:
- Tier 1: Some accounts permit users to designate a family member to access the account.
- Tier 2: If the site does not have a way to designate a successor, the will or other legal document can name one.
- Tier 3: The terms-of-service directions may indicate how to choose someone else—but access may be limited to the original owner.
Inventory Your Digital Assets
As you begin preparing your digital estate plan, you must create a list of them. It can involve many sites and accounts, and you will probably have to look up some information to get it all in one place.It needs to include any account you have online—especially ones with money in them—or value—or personal information. You should list all of them if possible. Include things like:
- Cryptocurrency accounts
- Non-fungible tokens (NFTs)
- Brokerage accounts
- Bank accounts
- Email accounts
- Cellphone accounts
- Social media accounts
- Cloud storage accounts
- Picture and video-sharing accounts
- Websites you own
- Accounts that let you make purchases (Amazon, Paypal, eBay, etc.)
- Online storefronts
- Credit card accounts
- Airline and hotel reward accounts
- Gambling accounts.
If you receive bill notices and make payments through your cell phone, family members will also need access to your cell phone for these purposes. If you use your cellphone to access bank accounts, they will need that information, too.
State Your Intentions
If you want to see certain accounts closed, photos given to certain people, etc., you must state it in your digital assets plan. When you have certain information that you do not want your estate plan executor to see, appoint someone else to oversee that information in your will,Digital Assets That You Cannot Put in a Will
There are some things that you cannot put into a standard will. WillMaker says email accounts, licensed domains, social media accounts, accounts you have by subscription (such as Spotify or Netflix), and financial software.Download Data to the Cloud for a Backup
Just in case the information on your access sites cannot be opened by your family members or beneficiaries after you die, having the data backed up to the cloud can make it easier. It may include materials you created, such as music compositions, books or eBooks you have written, articles, blog posts, documents, etc. You will also have to provide information on how to access the files in the cloud in your digital assets plan.Making sure that the data is not just on computers at home can prevent it from being accidentally stolen, lost, or destroyed (think fire, flood, etc.). You can also put a copy on more than one digital device.
Giving access to an executor may need to be done according to a law called the Revised Fiduciary Access to Digital Assets Act. Several states have versions of it, SmartAsset says, which gives an executor legal access to your digital assets.
Caution When Creating Your Will
The information contained in your digital will should not be in your actual will. Once the estate goes through probate, the will and its contents become public information. It could be really bad news if you had all your accounts (especially bank accounts) and passwords posted online.When creating your digital estate plan, you should consult with an estate law lawyer who is familiar with the laws concerning digital estates. It is even more important if you have considerable monetary assets in various accounts.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
