Digital Assets in Estate Planning: Cybersecurity Concerns And Considerations
The growing level of digitization in every aspect of life has also led to the trend of storing multiple financial assets in digital form. People want to own and preserve digital assets both for financial and sentimental value. The increase in ownership of these assets has also led to a more pronounced threat in the form of cybercrime.
An experienced estate planning attorney will take into account the prevailing cybersecurity concerns and recommend failsafe methods to safeguard these assets during your lifetime and beyond.
What are Digital Assets?
Digital assets are non-physical assets that exist in electronic format, usually online. Digital assets held for their sentimental value include digital eBooks, movies, music, photos, documents and online stored information, subscriptions, cloud accounts, social media accounts, and smartphone applications.
Cryptocurrencies, investment accounts, bank accounts, income-gathering websites, credit card rewards, blogs, written works, and videos are a few examples of digital assets held for their financial value.
Need for Cybersecurity Measures in Estate Planning
The rise in digital assets has led to a rise in the threat of cybercrimes. Cybercriminals can easily hack into online user accounts to steal their information and sell it to the highest bidder on the black market. Cybercriminals are known to target online investment accounts with substantial financial gains.
In recent times, a New York couple unintentionally wired a payment of $1.9 million to cybercriminals that had hacked into their account and created fake wire transfer instructions for a business the couple intended to buy. In the same year, Morgan Stanley conducted a survey to reveal that cybercriminals had become the main concern for high-net-worth individuals.
Estate planning attorneys can play a critical role in managing and protecting your digital assets. Your attorney can help you navigate the legal framework for controlling these assets and create a safe, impregnable legacy for your future generations.
Laws Surrounding Digital Assets and Cybercrime in California
Different states have different legal treatments for protecting digital assets. In California, there are several statutes protecting digital assets from cybercrime:
- The Computer Fraud and Abuse Act (CFAA): This act criminalizes the intentional access of any computer device without permission or authorization to protect digital assets.
- The Stored Communication Act (SCA): This act basically protects electronic communication by prohibiting its unauthorized and intentional access.
Violation of these laws can attract a fine and jail time depending on the severity and nature of the crime. California has also adopted the Revised Uniform Fiduciary Access to Digital Assets Act (the California RUFADAA). Fiduciaries, such as the executors, power of attorney, trustee, guardians, and others have access to the client’s digital assets in the event of their death or incapacitation.
California enacted the RUFADAA to govern what happens to digital assets when a resident dies. The scope of RUFADAA is not limited to emails and social media accounts. It also extends to digital currencies, online files, assets, blogs, and domain names.
Without RUFADAA allowing them access to digital assets, fiduciary agents burdened with the duty to protect a client’s assets will not be able to collect the assets on the death or incapacitation of their client. Digital assets stored on the cloud can easily become soft targets for cybercriminals if they are left unmonitored and unclaimed.
How an Estate Planning Attorney in California Can Help Protect Your Digital Assets
Estate planning attorneys can perform a pivotal role in safeguarding assets, including digital accounts as per their clients’ wishes. Your attorney can help you take proactive steps for protecting your digital estate. You should create a list of all digital assets owned and instructions on accessing them individually.
Typically, this list or memorandum should be stored in a safe deposit vault or box. It should also be regularly updated and monitored. There are several secure password storage websites that can help you store your login information for different online digital accounts. Your estate planning attorney can help you find the right solutions for your needs.
Your estate planning documents should mention how you want your heirs and fiduciaries to access and manage your assets, including digital assets in case of death or incapacitation. Estate planning attorneys play a key role in safeguarding the digital assets of their clients in different ways. They can advise you on the following:
- Listing all your digital assets.
- Providing assessment information regarding individual digital assets.
- Passwords to different digital accounts.
Estate planning attorneys can also assist you in ensuring your digital assets go to rightful heirs on your death or incapacitation. With today’s world becoming increasingly technology-driven, estate planning attorneys are necessary for helping clients plan and protect their assets by drafting documents that address the protection, management, and secure distribution of these assets.
Estate planning attorneys can implement proactive measures for preserving these assets and helping clients navigate the legal system.
Our Trusted Estate Planning Lawyers will Recommend Failsafe Ways to Protect Your Digital Assets
If you wish to establish an estate plan for your digital assets or have any questions about an existing will or trust that involves digital assets, the attorneys at Garmo & Garmo, LLP can provide you with strong legal guidance and representation. Our dedicated attorneys are highly rated when it comes to helping clients document their wishes regarding digital and physical assets. To set up your complimentary consultation, call us at 619-441-2500 or reach us online.
