Digital assets should not be ignored in estate planning.
The digital world has grown exponentially over the years.
Gone are the days of dial-up and floppy disk storage.
With smartphones, people carry a personal computer in their pockets everywhere they go.
According to a recent Baltimore Business Journal article titled “Estate planning for your digital assets,” these technological changes have ushered in new estate planning considerations.
Now people not only have to plan for their tangible assets, but they also must plan for their digital assets.
These assets include all online accounts and any information stored electronically.
What is involved in estate planning for digital assets?
First, it is important to inventory assets.
Some digital assets can carry financial value.
These include accounts with gaming winnings, bank accounts, airline miles, event tickets, web domains, and cryptocurrency.
In some cases, they may be transferred to heirs.
Other digital assets involve social platforms, emails, business records, family photo albums, and other accounts.
These can be tricky when trying to define ownership.
While the content on these platforms is yours, the platform itself controls access.
This may complicate permissions for the agents and fiduciaries under your estate plan.
In fact, they may be denied control or access.
Because digital assets are relatively new, legal guidance regarding death or incapacity has been minimal until recent years.
The Uniform Fiduciary Access to Digital Assets Act (UFADAA) was proposed by the Uniform Law Commission in 2014.
The goal of the legislation was to provide direction and clarity to fiduciaries.
This law was revised in 2015, is now called the RUFADAA, and has been adopted by most states.
Now estate planning attorneys have guidelines for helping clients create plans for digital assets.
As previously mentioned, one must begin by inventorying all assets.
Digital assets can be included in your last will and testament or held in a trust, depending on the type of asset and its value.
If you fail to protect your digital assets through estate planning, you may leave yourself vulnerable to identity theft.
You can also complicate the managing of your finances and assets for your executor or power of attorney agent.
Automatic payments can drain money from accounts if left unaddressed.
If you have cryptocurrency, failing to plan can lead to losing significant sums of money.
Working with an experienced estate planning attorney can help you to adequately account for your digital assets in your estate plan.
Reference: Baltimore Business Journal (Sep. 16, 2021) “Estate planning for your digital assets”