When it comes to writing a Will, one thing most people overlook is including a reference to their digital assets. Although the concept of digital assets is relatively new, the need for creating a digital Estate plan has grown over the past few years.
Your digital records can have monetary or sentimental value and could be of importance to your loved ones. Including them in your Estate plan will ensure that they are safeguarded after you die and are transferred to the right people.
Types Of Digital Assets
First and foremost you should know about the different types of digital assets. Generally, they can be divided into two categories depending upon whether they have any monetary value.
Transferring Assets Which Have Monetary Value
Digital Currency: Digital currencies like cryptocurrency are assets that have monetary value and can be passed on to your heirs provided you plan ahead.
Since crypto accounts are very different from traditional bank accounts, they are less secure and more vulnerable to security risks.
These accounts are accessed with a private key which is not supposed to be shared with anyone. If a person knows this key, they could easily gain access to your crypto wallet and steal your cryptocurrency. Once gone, it usually cannot be recovered.
The two kinds of wallets used to store crypto are hot wallets and cold wallets. The former is less secure since they are always connected to the Internet. On the other hand, cold wallets allow you to store your crypto for a long period.
If your crypto is stored in hot wallets like Coinbase, your executor will have to reach out to the exchange directly and talk about transferring your assets. This will require documents like probate papers, identification, death certificate, and a copy of your Will.
In the case of cold wallets or paper wallets, your crypto is stored offline. You take a print of the key on paper which can be used to access the crypto. Since this becomes a physical possession, make sure you design an appropriate storage method for it.
A fireproof safe or a safety deposit box will be good options to consider.
Apart from this, make sure you document important information like the location of your private keys and other information required to access your crypto wallet.
If you have large amounts of crypto, there is a possibility that your Estate could be subject to Estate tax. In this situation, you should consider transferring your crypto to an irrevocable trust.
In your Will, make sure you lay out a detailed plan which makes sense to your beneficiaries. Name the beneficiary and include a document in your Estate plan which includes crucial information like passwords and instructions for access.
You can write your Last Will & Testament with the help of online services like ELM Legal Services which has partnered with CoinCover to provide cryptocurrency protection.
This will help enable beneficiaries to receive their crypto assets.
Digital Tokens: Digital tokens can dictate the number of digital resources you own or determine your right to access certain products and services. They are also referred to as electronic data units.
The company which offers the token will usually be in charge of determining the kinds of rights and benefits the investor gets.
Loyalty Points: Not all loyalty points can be transferred but certain ones like Tesco Clubcard points can be.
With some loyalty cards, you will have to reach out to the company before your death and name your beneficiary if you want to transfer your loyalty points.
PayPal: A person’s PayPal funds can be transferred to the beneficiary if a certified copy of the Will is provided along with instructions from the executor of the Estate.
When everything is verified, Paypal will send a cheque in the name of the deceased account holder.
If there is no Will, the procedure of getting funds is more difficult. The administrator will have to provide a statement along with documents like the death certificate and grant of probate.
Digital Music & Books: These cannot be sold or transferred since they are owned by the company.
While most of the time they cannot be passed on, it depends upon the company and its policies. In some cases, if the assets are licensed and the terms of the agreement don’t mention anything specific, you might have a chance.
Subscription accounts like Netflix and Spotify cannot be passed by your Will since they are owned by the service providers.
Transferring Assets Which Don’t Have Monetary Value
There are also digital assets that don’t have any monetary value but are of great sentimental importance to the loved ones of the deceased.
Digital Photos/Videos/Data – Depending on how the person has stored their photos and videos, the process can be easy or difficult.
If account details have been left in the Will, they can be used to access the deceased’s Google account and download photos from the Google Photos library.
Google does allow third parties to access their deceased loved one’s account provided they are represented by the account holder’s legal representative. However, this might not always be successful.
It also has an Inactive Account Manager feature which can transfer the deceased’s email address and Google products to the beneficiary.
Social Media Accounts: With social media accounts, loved ones can apply for a legacy contact which will allow you to manage a memorialized account in which you can share a pinned message and update the profile picture.
However, you won’t be able to log in, read messages, or change old posts.
Tips For Effective Transfer Of Digital Assets
- Make a list of the different types of digital assets you own. Note down how each asset can be accessed along with information like passwords and other instructions.
- Create a detailed plan on how you want your digital assets to be distributed. Note down which assets you want to pass on and which ones you want to be erased. Name the people you want to pass them on to.
- Appoint your executor who will be entrusted with the handling of these assets.
- Turn your plan into a formal digital Estate plan and make a note about it in your Will. You should let your executor know where your digital Estate plan is stored.
Hiring a legal professional or taking the help of a Will writing service will help you ensure the secure distribution of your digital assets. These kinds of assets are vulnerable to hacking especially if the accounts remain dormant for too long.
We hope that with this information it will be easy for you to factor in your digital assets in your Estate plan.