This is an article from the Hammond Law Group (http://coloradoestateplan.com/) in Colorado Springs, Colorado, that we thought others may find helpful.
The digital age has made many aspects of life much more convenient. Without leaving the comfort of our bedrooms, we can simply post our photos online and show our family and friends how much fun we had at the lake last weekend. Purchased movies and songs can be streamed to almost any device seamlessly and we can send and receive detailed conversations in an instant. And that’s just the tip of the iceberg…..
Our lives are becoming increasingly digital and there are no signs of slowing down anytime soon. Unfortunately, with all this new technology comes new obstacles. We’ve created these wonderful tools, but we’ve barely scratched the surface of how they can be used against us. As our digital footprints grow, what happens to all that information after we die?
What is a Digital Asset?
A digital asset is basically anything that is managed virtually. This could include email, social media accounts, music, voice files, or digital currency. Laws have been passed by several states allowing people to specify in their will that an executor or fiduciary (someone appointed to manage the property of another person) can access their email and social media profiles.
Some companies have tools that allow you to establish rules for accounts that are inactive for a certain period. For instance, Google has its “Inactive Account Manager” tool that will allow you to send info to trusted contacts or delete your accounts after a specified period of time.
Digital Currency
Digital assets are more than email and social media accounts. They are increasingly becoming part of our everyday financial lives as well. While bank accounts, even those that are primarily managed digitally, have other ways of accessing the funds, the same cannot be said about a relatively new form of money: cryptocurrency.
Most anyone will agree that the concept of cryptocurrency is complicated, but basically it is digital currency that uses cryptography or codes to ensure security. The most well-known cryptocurrency is Bitcoin, but there are hundreds of different types. This money only exists digitally and there have been many stories where thousands (or millions) of dollars were lost due to a forgotten password or misplaced hard drive. If you intend to include cryptocurrency in your estate, it is essential that you keep the information needed to access the funds in a secure place that your loved ones can find it.
There are some issues that we have to address with our clients when they have this type of asset. Is the cryptocurrency titled in your name? Is the title transferable? Could we transfer the title to your revocable living trust, so the trust could manage it if you’re no longer able to? If we can transfer title, is there anything else that we need to provide to the trustee, so they can get access to the currency, such as a key?
My recommendation, when people have digital assets or sensitive digital information to which they want their successors or personal representatives to have access, is that they should always pass on that information in a manner that makes them feel most comfortable. Providing a list is one option, so is using one of those online services where you can store your passwords. Of course, you want to make sure that your successor has the authority to access this information, but it really depends on the individual and what they are comfortable with.
Digital Assets and Your Estate Plan
Just like everything else in life, you need to prepare for what happens to your digital footprint. Have a plan for your email and social media accounts once you are gone and know who can manage your sensitive information when you are no longer able to.
If your estate planning attorney is not asking about your digital assets or hasn’t clarified your plan to address the digital footprint that you’ll be leaving, then you should bring it up at your next meeting. There may be some way to get into your Google or Facebook account after you have passed, but you want to make sure that those steps are in place. Otherwise, that information may still be out there, which leaves us susceptible to hackers or identity thieves. So, you want to make sure that information is locked down or wiped away once you are no longer here to monitor it yourself.
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- Irrevocable Medicaid Trusts - June 16, 2020
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