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Estate Planning for Digital Assets

Posted by Thomas Asbury | Nov 07, 2022 | 0 Comments

Do you also own a computer, smartphone, tablet, or another personal electronic device that requires a password to access it? Who else has that knowledge besides you? What will happen to your information if something horrible occurs to you?

Maybe you have active online accounts requiring a username, password, key, or other credentials to access them. Examples include banking, trading, cryptocurrency, NFTs, e-mail, social media, and games. Who will be able to access these accounts if something were to happen to you? While we are still alive, technology can make life easier. However, when we get sick, are disabled, or pass away, then technology can make life much more difficult. The relevant legislation is far from enactment. Planning for access to (and disposal of) your digital assets is critical. You must identify your digital assets and specify who will have access to and control should you fall ill, become disabled, or pass away. Specifically, how would you like your digital assets to be addressed (i.e., to pass to a beneficiary as a bequest essentially, removal and permanent deletion, or something in between).

Identify Your Digital Assets

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Identifying your "digital assets," which generally refers to all your digital assets and electronic communications, is the initial step. Any digital file type, like images, audio files, and videos, as well as any online account (which may include e-mail, software licenses, social networking accounts, file sharing, domain registration, domain name service, financial management, online stores, games, and frequent flyer accounts) as well files stored in the cloud, a computer, or another electronic device, are included in these assets (e.g., desktop, laptop computer, tablets, storage devices, smartphone, etc.).

Make a Digital Assets List & Check it (at least) Twice

Once you've determined what digital assets you have, you may create a list of all of your accounts, numbers, usernames, passwords, PINs, security questions, and answers, as well as other data. Safeguard the data once your inventory of digital assets is complete. Maybe you feel safe giving the inventory to a relative or potential fiduciary. You might want to look into a secure online storage solution if your information is more complicated, contains corporate assets, or involves blockchain assets. These services could also make it more convenient to update your digital asset inventory frequently.

Digital Assets Access

Your power of attorney agent's, conservator's, executor's, or trustee's rights to access, control, and dispose of your digital assets are not totally apparent. Connecticut is one of the states with laws governing access to digital assets, but the types of digital assets and the tools that may be required to access, manage, and dispose of them are evolving more quickly than the laws.

Many online accounts contain license agreements and contracts that limit who (other than you) can use your account and when. As there are multiple online account providers, there are various policies as well. When an account holder passes away or becomes otherwise unable to handle her digital assets, this may cause issues. In light of the legal difficulties, your estate.

Disposition of Your Digital Assets

It is crucial to express your wishes for your digital assets in writing. Should family and friends have access to a file or account when you are no longer able to access or manage your digital assets? And should they . . . especially if the account contains personal content (like images or writings)? Should the account be closed?

Some types of digital assets, such as blockchain (cryptocurrency and NFTs) assets that may be transferred when accessible, brokerage accounts, online bank accounts, and trading accounts, have monetary value. Others have monetary worth that can be transferred or swapped, like domain names, music rights, music storage accounts, or a PayPal credit balance. Other assets, such as images, recipes, and manuscripts, which have enormous sentimental or family historical significance, may only exist in digital form.

About the Author

Thomas Asbury

Mr. Asbury is a graduate of the Wharton School of Business at the University of Pennsylvania. Before attending law school, Tom worked in the Internet sector as the Webmaster for the NFL’s Jacksonville Jaguars. While in law school, he published a law review article entitled Alternative Sentencing Theory, 3 Fla. Coastal L. J. 41 (2001), which identifies a constitutional framework within which defendants charged with alcohol and drug-related crimes can be remanded to faith-based programs rather than prison for non-violent offences. The logic is quite simple—as sobriety becomes the norm and addictions subside, so too do the often-accompanying crimes. His professional experience includes estate planning, corporate law, compliance law, guardianships, trademarks, probate, trust and probate litigation, including trust and will contests, administrative law, and consulting for business entities. Mr. Asbury has also lectured for NBI Seminars in the areas of Probate, Wills, Trusts, and Estates. Tom has also served on the Penn Admissions Committee for years as an alumni interviewer and is an international lecturer on the focus and philosophy of Ivy League admissions.

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