Digital Assets And Estate Planning The Basics
On Behalf Of Gregory D. Supple
Digital assets often require specific language within a will or trust to ensure proper handling.
Estate planning is a much more complex process now than it once was. In addition to conveying real property like homes, vehicles and personal possessions, estates are also composed of an array of digital assets. This can include PayPal accounts, Etsy shops and Facebook pages as well as online bank and investment accounts. A well-structured estate plan should provide for these assets.
Tips For Including Digital Assets In An Estate Plan
Navigating the legal issues surrounding inclusion of digital assets in an estate plan is such a prevalent problem that a recent article in the Wall Street Journal reviewed possible solutions for an easier transfer. The article touched on many issues, including the difficulty of granting access to the accounts to a fiduciary and the potential risk of accounts getting hacked. If successful, the hacker could potentially follow a trail from the digital asset back to a bank account. As a result, the legal and financial experts with the article encouraged inclusion of a provision either within a will or trust that allows the executor or trustee to access digital accounts and “modify, control, archive, transfer and delete all digital assets” as needed. Having this ability, they contend, decreases the risk of a hacker breaking into the account as the fiduciary or executor can manage and monitor the account.
In addition to adding this provision to the applicable documents, it is also wise to:
- Put together an inventory. A recent article by the American Bar Association, a group of legal professionals from throughout the country, notes that the most difficult portion of fulfilling an estate plan can be locating assets. This is particularly true when it comes to digital assets which are often stored in different computers, in the cloud, on different websites and on drives hidden in safety deposit boxes. Having an inventory that identifies the type and location of all digital assets can greatly reduce the time and effort needed to find and account for the assets. The inventory should include all hardware like computers and drives, software like financial programs, online account information and work information.
- Instruct. In addition to providing an inventory stating where digital assets can be found, instructions on how to access the asset should also be provided.
- Revise. As with any portion of an estate plan, it is wise to revise the distribution and handling of digital assets on a regular basis. This includes major life events like marriages, divorces, deaths or births as well as changes in the law.
Due to these complexities and the evolving nature of estate planning law, it is wise for those who are considering an estate plan to seek the counsel of an experienced estate planning attorney.