Our Asset Protection Lawyer Explains Protecting Digital Property
Digital assets may sometimes complicate estate plans for families. In fact, there are recent examples of digital assets causing serious issues for beneficiaries. Matthew Mellon, a banking heir, passed away with millions of dollars in cryptocurrency assets. After Mellon's passing, numerous news articles discussed the possible fate of his $500 million in cryptocurrency.
Some people may pass on with other types of digital assets, such as online banking accounts, social media profiles, and family photos and videos. Many of these assets are password-protected and encrypted, making it difficult or even impossible for third parties to access.
Fortunately, you do not have to make a mistake when it comes to including digital assets in your estate plan.
What Are Examples of Digital Assets?
Digital assets, also called digital property, are assets that are stored online (such as on a cloud-based service). Examples of digital assets may include but are not limited to:
- Cryptocurrency: There are many types of cryptocurrencies. You may have heard of more popular cryptocurrencies, such as Bitcoin, Ripple and Zcash. Among other things, these digital assets use cryptography to make transactions more secure.
- Digital financial records: Some services allow you to store your financial records on a secure cloud-based service. However, these records require a password to recover, which is problematic for beneficiaries to an estate plan. Laws may prevent businesses from allowing third-parties to access these digital assets.
- Social media profiles: Everyone knows that it is common practice to store videos, photos and written content on social media profiles. However, companies may not turn over passwords after a person has died.
- Online stores: Other types of profiles may contain digital assets that have a lot of worth, such as a Steam account. Steam is an online service used to purchase and play PC games. Some Steam account owners have thousands of dollars in games on their accounts. For an avid reader, Amazon accounts may contain thousands of dollars worth of books.
- Business assets: Business owners are extremely likely to have digital assets, such as intellectual property. This is only one of many possible examples.
Due to current laws, encryption, and the widespread use of passwords, it can be very difficult to access digital assets unless you plan ahead of time by putting together a solid estate plan.
How Can I Include Digital Assets in My Estate Plan?
Your first priority should be to contact an estate planning attorney who has experience with digital assets. After meeting with an attorney, you can begin working on additional steps for protecting digital property with an estate plan.
You could gather a list of all of your digital assets. In addition, be sure to gather the information that is necessary to access these assets. Gather your passwords and email addresses used to register the assets (if applicable). However, you should be very careful during this step. Work to ensure that login and other important information is secure. If you are unsure about how to do this, then ask your attorney.
After your passing or incapacitation, your executor or trust administrator can begin transferring assets based on the instructions left in your estate plan.
About Family First Estate Planning Law Center
Our Santa Ana estate planning law firm can help with your estate planning needs. We help with drafting wills, setting up power of attorney, establishing trusts and helping you protect your most cherished assets, whether they are digital or physical.
You can reach out to our Santa Ana asset protection lawyer by dialing (714) 591-0640 or by using our online case review form.