Every once in a while, the economic system evolves. It could be the result of new tax laws that change how we transfer assets or the development of an entirely new way to invest. The development of digital currency like crypto could be one of those evolutions … or not. The truth is we still do not know the impact of this new form of currency.
Whether they become a commonplace part of our financial portfolios or not, we know that digital assets are a part of our estates and that we should take steps to include them in our plans.
What exactly are digital assets?
Digital assets can range from those with actual financial value like Bitcoin or Ethereum to those with high emotional value like family photos saved in the cloud. They can also include online banking accounts, utility accounts, intellectual property, blogs, and websites. Basically, anything we access online could qualify.
Do I need to account for these assets in my estate plan?
If we want to transfer these assets to heirs, then yes. The transfer is not automatic and a failure to account for these assets can mean they are lost forever. The following steps can help to better ensure the assets remain within the estate:
- Organize. Put together a list of all digital assets. Online bank accounts, social media accounts, everything.
- Plan. Figure out who gets these assets. Perhaps the financial accounts go to the executor or a trust and are distributed with the estate and any business-related accounts or websites go to the next business owner while the emotional go to someone who would appreciate the value of the memories.
- Follow through. It is important to take steps to make the transfer happen. This can include having passwords available for the next owner of these assets as well as additional log on information.
This is just one type of asset to account for within an estate plan. It is wise to seek legal counsel to make sure these and all other assets are properly accounted for within an estate plan.