Today’s world is moving more and more to digital assets – some, more traditional, like online bank accounts, social media or websites. And, some more on the cutting edge of technology, like cryptocurrencies, NFTs and more.
A common question that is coming up in our estate planning discussions is what happens to all of those assets when you die? Can you put them in a Will or other common estate planning structure? We address all that and more below.
What Types Of Digital Assets Do You Have?
Although you may initially think you have a limited amount of digital assets that probably don’t have much value, you may be surprised. Some common things that many people hold digitally include:
- Digital images, videos, or written works that generate income
- Valuable documents and information stored in the cloud
- Blogs or websites that produce income
- Digital trademarks or copyrights
- Digitally stored music in the cloud or on computers
- Cryptocurrencies (Bitcoin, etc)
- Social media accounts
- Investments accounts or online bank accounts
Why Should You Include Digital Assets In Your Estate Planning?
By tracking and including your digital assets in estate planning, you make it easier for your family members to retrieve and secure these assets after you pass away. It can take away some of the hassles, like tracking down passwords and communicating with vendors to get access to these assets. It can also safeguard any revenue produced by these digital assets, such as royalties or income from online ventures.
How A Living Trust Can Help
One of the many benefits of creating a revocable living trust is that the trust may allow you to house and protect all of your digital properties and assets. The trust gives your beneficiaries, trustee, or custodian the authorization to access, secure and utilize your virtual assets.
Ownership of Digital Assets In North Carolina
While you are the owner of any online content and accounts you create, service providers still possess the licenses to use and access these accounts. If you have online content like a website or blog, for example, you own and control the content on it, but the hosting company holds and controls the access to it, and the domain registrar grants the license to use and access the domain name.
Upon notice of your death, many email providers and social media networks will disable accounts, although some, such as Facebook, are starting to allow a custodian to use the account or place the account in an “in memoriam” status.
The Revised Uniform Fiduciary Access To Digital Assets Act (RUFADAA)
The RUFADAA, which North Carolina has enacted along with many other states, governs access to a person’s online accounts when the account owner dies or loses the ability to manage their accounts. This act extends the traditional power of a fiduciary to manage tangible property to also include digital accounts.
The act allows fiduciaries to manage digital property like documents, websites, and cryptocurrencies, but restricts their access to personal communications such as email, texts, and social media unless explicitly allowed in estate planning documents.
What If I Don’t Want To Disclose All My Digital Assets?
If you have digital assets you don’t want to be seen by your beneficiaries, the RUFADAA provides a means to make that happen. You can provide your executor with instructions on handling or disposing of such assets, including such tasks as:
- Granting full or limited access to your digital assets
- Providing a copy of some or all of your digital assets
- Non-disclosure of any digital assets you have deleted
- Non-disclosure of digital assets that might cause the trustee undue burden
- Termination of your online accounts if the fiduciary requests it
We Can Help With Your Digital Asset Planning
Even though we are still in the early stages of an increasingly digital world, it’s important to specify what happens to your digital assets when you die. David Anderson and his team can help you craft an estate plan to ensure your family and loved ones are protected after your passing. Call or message us today to schedule a consultation!