Updated: Feb 3
One of the most effective ways to plan for the future, protect your legacy, and ease legal hassles for loved ones is to create an estate plan. There are numerous options available to state your intentions during your lifetime if you become incapacitated, while others enable you to distribute your belongings upon death. However, even as you assess your real estate, bank accounts, vehicles, and other tangible items, there is one type of property that you might not consider — digital assets in estate planning.
Digital assets are defined as any material stored in an electronic format that has value to an individual or could be used to derive value. Examples include photos, audio and video files, Bitcoin and other cryptocurrency, documents, website content, and many more.
When you realize the role they play, you see why digital assets are just as crucial to your estate plan as other belongings. Unfortunately, many people overlook this unique type of property, so the value could be lost entirely. With help from an estate planning lawyer, you can avoid the risk. Some background information on addressing digital assets may help you understand the basic concepts.
Options for Digital Assets and Incapacity
One key aspect of estate planning is addressing your needs if you are unable to make decisions regarding your property due to a medical condition. There are two options to consider as they pertain to digital assets:
● Durable Power of Attorney: With this document, you name an agent to handle your assets if you are incapacitated. A power of attorney allows someone to step into your shoes to manage your property according to your stated intentions. You can include instructions related to digital assets,
● Living Trust: When you establish and fund this type of estate planning structure, your living trust is the legal owner of all property titled in its name. Digital assets can be transferred into such a trust, which will be managed by the trustee appointed by you.
Distributing Digital Assets Upon Death
Your will is the foundation of your estate plan when you pass away. There are different ways you can handle distributions through your will, including a specific bequest to an individual. If these details are not stated, digital assets are distributed according to your general bequest instructions on the “residue” of your estate.
Important Tips for Digital Assets
As you work through the estate planning process, note that a critical first step is creating an inventory of all digital assets. This exercise will give you the big picture and guide you in deciding how to handle each item. It is also essential to include login credentials to make sure your loved ones have access.
Trust an Estate Planning Attorney to Advise You on Digital Assets
To learn more about your estate planning options, please contact Francois Williams Legal LLC. We can schedule a consultation to discuss the details regarding digital assets. Our team will advise you on creating an arrangement that suits your objectives, but we can also assist with adjustments to your existing estate plan to account for digital assets.