Estate Planning for Digital Assets
Have you ever thought about what would happen to your digital assets in the event of your death? If you haven’t, you are not alone. When it comes to estate planning, a vast majority of people tend to focus only on their tangible assets and investments. In fact, many people do not even realize that they own digital assets, which are valuable in their own right and need to be accounted for while creating an estate plan.
What Are Digital Assets?
The term ‘digital asset’ refers to any information, data, or item of monetary value which is stored electronically. These include:
Digital currencies have significant monetary value. For instance, a single Bitcoin is worth over $45,000. A single unit of Ethereum, while not nearly as valuable as Bitcoin, is worth over $3,000. If you own a few units of these coins, you should not only make sure your loved ones know about it, but also make sure they know how to access, trade, or sell these coins if needed – in the event of your death. This is one of the important reasons why you should include your digital assets in your estate plan.
Business Websites, Blogs, and Domain Names
If you have your own business, your business website, blog, and the domain names that you own might be valuable – not only because they are an integral part of your business identity, but also because they can help you generate a substantial amount of revenue through advertisements, affiliate links, sponsored posts, and other means.
Even if no one in your family is interested in running the business or maintaining your website and blog after your death, they might still be able to earn a substantial amount of money by selling these assets to a third party. So, you need to make sure you include these assets in your estate plan and specify who gets to inherit them in the event of your death.
Personal Digital Assets
If you have stored a large number of family photos, movies and music collections, and other data on the cloud, you need to make sure your family members are able to access it after your death. While these assets might not have monetary value, they have a lot of sentimental value and can help your loved ones preserve your memories and relive the moments you spent together as a family. So, you need to make sure your loved ones are able to access these data after your death.
Social Media Accounts
If you have a strong social media presence, chances are you have uploaded a lot of photos and videos – of yourself as well as your family members and friends – on your Facebook, Twitter, Instagram, and other accounts. In the event of your death, your family members should be able to access these photos and videos – for the same reasons stated above.
The Risks of Not Including Digital Assets in Your Estate Plan
The risks of failing to account for your digital assets are threefold.
- Digital assets are password protected. Particularly, assets like cryptocurrencies are hidden behind walls of encryption and can only be accessed with a private key. If you fail to include these assets in your estate plan and fail to provide the required information (usernames, passwords, answers to security questions, and private keys) your beneficiaries might not be able to access them at all.
- Digital assets have monetary value – just like any other type of asset you own. If you fail to include them in your estate plan, your loved ones might not be able to benefit from them in any way. It is no different than buying a property and failing to account for it in your estate plan. It is a waste of your hard-earned money.
- Digital assets like emails, social media accounts, and cloud storage accounts tend to remain active long after your death. The longer your accounts stay active, the higher are the chances of hackers gaining access to them. If they manage to do so, and if they use your identity to do something illegal, your family might have to deal with the repercussions. So, it is extremely important to list all your online accounts in your estate plan and make sure the intended beneficiaries have the information they need to access the accounts in the event of your death.
Need to Create an Estate Plan for Your Digital Assets? We Can Help You!
If you are planning to create an estate plan for your digital assets or modify your estate plan to include your digital assets, the estate planning attorneys at Garmo & Garmo can help you. With over 80 years of combined experience, our attorneys are best suited to help you with all your estate planning needs.
To find out how you can ensure your digital assets are protected and managed as per your wishes after your death, call our firm today at 619-897-2144 or contact us online and schedule a free consultation with one of our California estate planning lawyers.