The increasing prevalence of digital assets as part of financial and personal estates presents unique challenges for heirs handling a decedent’s estate. Financial accounts, emails, social media profiles, and even cryptocurrencies are all types of digital assets that could become part of an estate. Understanding the ins and outs of navigating digital assets is a vital skill in the digital age.
Understanding Digital Assets: What Are They?
In essence, digital assets include anything which exists in a digital form and comes with the right to use. Emails, digital music, digital photographs, digital books, files stored on digital devices, Bitcoins, and many others are included under this umbrella. They can also include online accounts like social media profiles, banking accounts, email accounts, and websites or blogs.
While digital assets may not always have physical value, they can carry emotional value or intellectual property rights, making it imperative for heirs to know how to handle these assets prudently and according to the decedent’s wishes.
Identifying and Assessing Digital Assets
The first step in navigating digital assets is to identify what they are and their associated value. If the decedent left a detailed inventory of digital assets, this process would be simplified.
Key digital assets to look for include:
- Digital Wallets: These could include cryptocurrencies such as Bitcoin, Ethereum, or other digital currencies.
- Digital Accounts: This encompasses email accounts, social media accounts, cloud storage accounts, financial services accounts, and online shopping accounts with saved asset information.
- Domain Names: These may offer significant value, as popular or high-traffic domain names can be sold to interested parties.
- Intellectual Property: This refers to digital products such as music tracks, published e-books, or software that the decedent created and sold online.
Heirs should remember that determining the financial value of these assets may require professional input. For example, the value of a domain name or cryptocurrency can fluctuate dramatically, affecting estate value.
The Importance of Digital Executors
In an increasingly digital world, the role of the digital executor is becoming more vital. This individual is responsible for managing the digital assets of an estate. While this can be the same person who manages the other parts of an estate, managing digital assets can be complicated and time-consuming, so it often makes sense to assign someone experienced in digital matters to this role.
Responsibilities of a digital executor can include identifying digital assets, determining their value, ensuring digital bills and expenses are paid, distributing assets according to the will, and even managing social media profiles. When choosing a digital executor, it’s essential to select someone tech-savvy, trustworthy, and efficient.
Legal Challenges and Privacy Laws
The legal landscape governing digital assets is complex and evolving. A major complicating factor is privacy law. Many digital companies, such as Google or Facebook, have policies that prevent anyone from accessing accounts, even in the event of the account holder’s death.
Furthermore, laws often vary by location. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in the US, for example, allows fiduciaries to manage digital property like computer files, emails, and social media assets, yet it restrains a fiduciary’s access to electronic communications unless the original user consented in a will.
Making sure digital assets are included in estate planning, express consent is given, and digital asset instructions are clear can help to reduce potential legal issues down the line.
Managing Social Media and Email Accounts
Many digital assets revolve around the individual’s online presence. Social media and email accounts can offer sentimental and authentic value, serving as a record of the decedent’s life.
Each social media platform usually has its own policies regarding account management after the user’s death. On Facebook, for example, you can memorialize an account or delete it entirely. Twitter offers the option to deactivate the account, while LinkedIn permits immediate family members to close the account of a deceased person.
Cryptocurrencies are relatively new but fast-growing digital assets. Bitcoins and other cryptocurrencies are stored in digital wallets protected by cryptographic keys.
To inherit cryptocurrencies, one must have access to these keys. Therefore cryptocurrency owners should ensure these keys are included in their estate planning. Without the keys, these assets can end up being lost forever.
Understanding their volatile nature is important too; their value can dramatically fluctuate, and they can also be subject to regulatory scrutiny. This makes handling cryptocurrencies as part of an estate notably complex, requiring both technical and legal knowledge.
In conclusion, navigating digital assets is an intricate process with many facets. Seizing the rapidly evolving digital world’s opportunities requires preparedness, knowledge, and an understanding of the complex legal landscape. Estate planning should evolve to acknowledge and incorporate digital assets, ensuring that these assets are not overlooked or mismanaged.
