It only makes sense that as our lives become increasingly digital, so do many of our assets. Digital assets include anything from bitcoin investments to domain names that host personal blogs. Despite how common these assets are, they are rarely considered in people’s long-term financial planning. That’s why the idea of a digital inheritance is emerging as a highly important area in Estate Planning.
People need to consider how their email accounts, online investments, social media handles, and more will be handled in the future. If not, these assets, and any funds or memories that they contain, could potentially be lost online -- along with the chance to pass them down to family members and friends. Keep reading to learn how to set up an inheritance that takes all of your online assets into account:
Can You Inherit Digital Assets?
You can inherit any digital assets that are fully owned and transferable, so long as they are designated in an official Estate Plan. If there is not a specific beneficiary named for digital assets, control may pass to the Executor of the Estate and ultimately the next-of kin. In some cases, digital assets may be overlooked entirely, especially if the family is not aware they exist.
Note that because the digital space involves so many private companies, the rules surrounding if and how they can transfer vary slightly. It is important to be aware of data privacy laws and criminal regulations surrounding access to another individual's personal digital assets. For this reason, it is crucial to include digital assets (and how to access them) in an Estate Plan.
What Are Examples of Digital Assets That Can Be Inherited?
As a general rule, digital assets that are owned outright can be passed down through a Will. The key is to confirm that the asset in question is transferable -- as some digital assets may specify against it. Here are some examples of digital assets that can be inherited:
Bitcoin and other forms of cryptocurrency
Non-fungible tokens (called NFTs)
Funds kept in online accounts, such as PayPal
Money inside an online store, if you have an Etsy or Amazon shop
Digital music files or pictures
Frequent flyer miles, depending on the airline
Blog content or other online published works
Monetized video channels actively earning advertising revenue
Online investment portfolios and wallets
Are There Digital Assets That Cannot be Inherited?
When talking about the ownership of digital assets, an important distinction emerges between transferable and non transferable assets. Typically the non transferable category includes digital assets that are licensed for personal use, but are not actually owned by individuals. These assets therefore cannot be inherited; though you can specify how to access them in an Estate Plan. Here are a few examples:
Social media handles and accounts
App accounts and the information contained in them
Subscription services, such as Apple TV or Spotify
Any assets deemed non transferable in the terms, this is most common with domain names
What Are Digital Assets in Estate Planning?
Digital assets can be treated like any other personal property in Estate Planning, as long as you take steps to include them in your Will. Unfortunately, it is all too common for individuals to fail to disclose information that could provide loved ones access to certain digital assets. This can lead to the loss of personal information or pictures, and in some cases additional funds that could have been passed down.
As digital assets become more common, it is increasingly important to specify how they will be handled within your Estate Plan. This means including a list of digital assets, how they should be transferred, and instructions for beneficiaries to gain access. During the Estate Planning process, it is often recommended to write down important account information and passwords for loved ones to help ease this process in the future (especially the access keys to any cryptocurrency).
The transfer of digital assets does bring up privacy concerns. After all, you may not want family members to necessarily have access to your email or social media accounts. In these cases, it is especially important to determine who to provide account information to. You can even disclose in your Estate Plan assets that you do not want to become accessible after your death.
When it comes to cryptocurrency or bitcoin inheritance planning, proper documentation is essential. Just like with tangible assets, you want to make sure that ownership can smoothly transfer to your beneficiary. Because these investments are gaining popularity so rapidly, the regulations are changing as well. Read our guide on how to leave cryptocurrency in your Will for a more specific overview.
Update Your Estate Plan to Include Digital Assets Today
The simplest way to ensure your digital assets are taken care of in the future is to include them in your Will. Not only will this information point your loved ones in the right direction, but it can also save them time in managing and closing your Estate. Whether your digital assets include cryptocurrency or funds from an online store, it is crucial to designate how these funds should be managed.
Estate Planning with digital assets can be somewhat difficult to navigate alone, particularly as regulations on the transfer of online assets consistently update. By working with an Estate Planning lawyer, you can receive personalized guidance on organizing the future of your digital assets. This can help you set aside valuable funds for loved ones, protect your personal privacy, and decide how your online presence is managed. Learn more about our services to get started today.
Everything from work meetings to birthday parties have moved online in the past year. Despite a return to “normal” life, it seems the digital wave is not slowing down anytime soon. Consider how many digital assets you currently have and how you want them managed in the future. It may be time to establish a digital inheritance for your family and loved ones.
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