
In the digital age, we all accumulate a growing collection of online accounts and assets, ranging from financial accounts to social media profiles. However, when it comes to estate planning and probate, many individuals overlook the importance of managing these digital assets. Without proper planning, your digital property could be lost, inaccessible to heirs, or subject to privacy concerns after your passing.
This blog post explores the role of digital assets in estate planning and probate, why they matter, and how you can ensure they are properly handled as part of your overall estate plan.
What Are Digital Assets?
Digital assets refer to any electronic or online accounts, files, or intellectual property that you own or have access to during your lifetime. These assets can vary widely in value, function, and importance, and may include:
Financial accounts: Online banking, investment accounts, and cryptocurrency wallets.
Email accounts: Personal or business email addresses containing important information.
Social media accounts: Profiles on platforms such as Facebook, Instagram, Twitter, and LinkedIn.
Online subscriptions: Paid accounts for services like Netflix, Amazon, or digital news platforms.
Digital files: Photos, videos, music, or e-books stored on cloud services like Google Drive or Dropbox.
Cryptocurrencies: Digital currencies such as Bitcoin, Ethereum, or NFTs (non-fungible tokens).
Domain names and websites: Any websites or blogs you own or manage, which may have both sentimental and monetary value.
Why Digital Assets Matter in Estate Planning
While digital assets may not seem as tangible as real estate or financial accounts, they can hold significant monetary or sentimental value. Failing to include them in your estate plan can lead to the following challenges:
Loss of value: Cryptocurrencies and other digital investments may be lost if heirs do not have access to login credentials.
Privacy concerns: Without clear instructions, private or sensitive information in email or social media accounts may be accessed or deleted inappropriately.
Legal and logistical difficulties: Without a designated plan for digital assets, executors and heirs may struggle to gain access to online accounts, especially if they are protected by strict privacy policies or encryption.
Intellectual property rights: Digital creators (bloggers, photographers, etc.) may leave behind intellectual property with ongoing revenue potential that needs to be managed.
The Role of Digital Assets in Probate
When someone passes away, their estate enters the probate process (unless assets are held in a trust or otherwise avoid probate). Probate includes settling debts and distributing assets to heirs, but without proper documentation and access, digital assets may be overlooked or difficult to manage.
Challenges in probate for digital assets:
Access restrictions: Many online platforms have strict privacy and security policies that prevent others from accessing accounts, even after the owner’s death. Without the necessary login information, executors may struggle to retrieve account details or close accounts.
Lack of clarity: Wills often do not specify instructions regarding digital assets, leaving executors unsure of how to handle them.
Legal grey areas: Digital assets are relatively new in estate law, and some states, including California, are still developing clear legal frameworks for managing digital property during probate.
To prevent complications, it’s essential to take proactive steps to address digital assets in your estate plan.
How to Include Digital Assets in Your Estate Plan
Here are steps you can take to ensure your digital assets are protected and accessible after your passing:
1. Create an Inventory of Digital Assets
Start by making a comprehensive list of all your digital accounts and assets. Include important details such as:
Account names and websites.
Usernames and passwords.
Instructions on how to access, manage, or close each account.
This inventory should be updated regularly to reflect any new accounts or changes in login information. It can be stored in a secure location, such as a password manager, where your executor or trustee will be able to access it.
2. Appoint a Digital Executor
In some states, you can appoint a digital executor—a person responsible for managing your digital assets after your death. While not yet recognized in every jurisdiction, appointing a digital executor can be helpful in ensuring your online accounts are properly managed. In California, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) allows executors or trustees to manage digital assets with explicit permission.
3. Include Digital Asset Provisions in Your Will or Trust
Clearly state your wishes for how digital assets should be handled in your estate plan documents, such as your will or living trust. You might want to include instructions on:
Closing or memorializing social media accounts.
Transferring digital financial assets like cryptocurrency or PayPal balances to beneficiaries.
Gifting specific digital property, such as a photo collection, to family members.
Managing intellectual property or digital businesses.
Make sure your estate planning attorney understands how to incorporate these instructions into legally binding documents.
4. Use Online Tools Provided by Service Providers
Some platforms offer built-in tools to manage what happens to your accounts after your death. For example:
Google’s Inactive Account Manager allows you to designate a trusted contact to manage your account after a certain period of inactivity.
Facebook allows users to choose whether their account is memorialized or deleted after death and to appoint a “legacy contact” to manage the account.
Taking advantage of these tools can streamline the process for your executor and ensure your accounts are handled according to your wishes.
5. Encrypt and Secure Sensitive Information
If you store sensitive data online, such as financial information, legal documents, or private communications, make sure it is encrypted and that only trusted individuals know how to access it. This is particularly important for cryptocurrency and other assets that rely on private keys for access.
Conclusion
Digital assets have become an integral part of modern life, yet they are often overlooked in estate planning. By taking proactive steps to inventory your digital assets, appoint a digital executor, and provide clear instructions in your estate planning documents, you can ensure that your digital legacy is protected and that your loved ones are able to manage your digital property effectively after your passing.
If you are unsure how to include digital assets in your estate plan, consult with an experienced estate planning attorney who can guide you through the process and help you navigate the complexities of digital estate planning.
This blog post explains the role of digital assets in estate planning and probate, offering practical tips on how to manage and protect online accounts and digital property.
Contact Us for Legal Help
If you have questions about estate planning and estate taxes, a California probate, your responsibilities as a Trustee, or how to properly administer a California trust, contact the top-rated California trust and probate attorneys Moravec, Varga & Mooney – today to schedule a telephonic consultation. Have questions, call (626) 460-1763 or email LV@MoravecsLaw.com.
Southern California Probate Lawyer Serving all counties in California, including Los Angeles, Riverside, San Bernardino, Sacramento, Santa Cruz & Beyond.
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