What Do Digital Assets Have to Do With Estate Planning?
About 16% of Americans report that they have investments in cryptocurrency and other digital assets. If you’re one of them, it’s important to include digital assets in your estate planning process. Working with an estate planning lawyer will help you plan for the future and protect all of the digital assets you’ve amassed over your lifetime.
What Are Digital Assets?
Digital assets include investments, such as NFTs and cryptocurrency. You might be surprised to learn that digital assets also include content. If you have a blog, social media profile or website, this content counts as a digital asset, and it should be included in your estate plan.
Choose a Manager for Digital Content
If you want to have your digital content managed upon your death, you will need to include a trustee or manager for it in your will. For example, if you operated a monetized blog, you would need to have a plan in place for its continued operation and who would get the income from it. If you want the monetized blog shut down upon your death, you will also need to have a plan in place for that in your will and with the web hosting service or platform where your blog data is stored.
Determine Control of Accounts and Passwords
Your estate plan should also include who will control all of your online accounts. You may have accounts on online auction and shopping platforms, brick-and-mortar and online banking institutions, content subscription services and more. Upon your death, you will need to have someone manage those accounts. Even if you want the accounts shut down upon your passing, someone will need to have your user identification and password. They may also need notarized documentation of your wishes in order to manage your accounts.
Designate a Beneficiary
Even if the value of your digital assets is intangible, such as a blog, you should still designate a beneficiary for all of them. It’s possible that the niche you write your blog about could suddenly become a huge money-maker. Your family could end up fighting over who gets the proceeds for selling your domain name or content. A small share of Bitcoin might have a modest value today, but that could change next year. Designate a beneficiary for all of your digital assets.
Plan for Market Volatility
When dividing your assets among heirs, consider market volatility. Digital assets have more volatility in their values than real estate, gold and other traditional investments. If you leave all of your cash to one grown child, all of your property to another and all of your digital assets to a third, the person who receives just digital assets might be on the losing end of the deal if market volatility wipes out most of the value by the time of your death. Keep market volatility in mind, and consider an even allocation of different asset types in your estate plan.
Consider Inflation and Conflict
In 2022, the United States has experienced inflation higher than it has since the early 1980s. Geopolitical conflict, such as the Russian invasion of Ukraine and the subsequent actions of sanctions, oil bans and restrictions on imports and travel, have only added fuel to the fire of volatility, inflation and unease for all types of assets and investments. Your estate plan should take into account the potential for inflation and conflict and how they will affect the values of your digital assets.
An estate planning lawyer can assist you with setting up inheritance and management of your digital assets. Anyone with digital assets could benefit from a consultation with a lawyer to review their plan. To schedule a consultation with The Knee Law Firm’s Hackensack office, call 201-996-1200. You may also request an appointment online by completing our online contact form and an office associate will reach out to you with available appointment times.