We are gradually transitioning into a digital world governed by security, privacy, and permanence. With scaling technology, it becomes all the more important to adapt to digitalization and acquire and preserve essential assets of high value in the form of digital assets in a will.
This article will dig deeper into digital assets that can be of great value shortly. We will also see the digital assets clause in will, a digital will and strategies to include digital assets in estate plan.
What are Digital Assets?
Digital assets are everything that can be made available in a digital format. The term digital assets are used to describe media forms that were previously considered to be physical objects, such as images, movies, and documents, but which started to be produced, saved, and shared in a digital environment.
Digital assets also cover investable asset classes like cryptocurrencies, NFTs, asset-backed tokens, and tokenized real estate with the development of blockchain technology.
The term evolved to emphasize assets supported by a distributed ledger rather than digital media files as these new blockchain-backed digital assets have grown in popularity.
Many physical assets, including commodities and real estate, may be tokenized to form a digital asset that can be traded, expanding the potential of digital asset marketplaces.
A digital asset in a will can also be used to refer to anything that has a “right to be used,” such as:
- Email addresses
- Social media profiles on sites like Facebook, Twitter, TikTok, and Instagram
- Any websites and domains you own
- Cloud storage services including Apple iCloud, Google Drive, and Dropbox
- Accounts with online banks
- Third-party payment processors
- Files you keep on your desktop, laptop, or mobile device, such as:
- Family pictures and movies in Word documents
- Anything else you’ve produced and digitally saved
How are Digital Assets dealt with under a Will?
Many digital assets have a monetary value, including cryptocurrencies and the balance of third-party payment processors like Paytm and GooglePay. For this cash to be distributed to your beneficiaries as per your will, you must complete specific steps digital asset inventory, starting to pass on digital assets through a digital will.
Social networking profiles and picture-sharing websites sometimes have sentimental significance despite not having monetary value. After you pass away, your family members might desire to possess these pictures.
For instance, your Facebook Account can be accessed by your close family or friends by adjusting the settings. After passing, you may enable this feature and designate a Legacy Contact to manage your account.
However, our family members won’t be able to access your digital assets if you pass away without making any plans for them. Even though you might provide them access to your account passwords, the law does not permit this. In the past, the deceased person’s family has been charged with “hacking” their loved one’s accounts.
By including digital assets in an estate plan, your digital assets can be transferred to whoever was eligible to inherit under the laws of intestacy if you passed away without leaving a legal will along with the rest of your estate.
Digital Assets That Can Pass Through Your Will
What assets are controlled by will? When you pass away, your estate plan will comprise all of your digital possessions with monetary or tangible worth. Some examples where you can include digital assets in a will are:
- Bitcoin and other cryptocurrencies
- digital music
- photographs that you own and keep on your computer’s hard drive
- Cash in third-party payment portals
- money owed to you by an online retailer like Amazon
- Frequent flier miles issued by airline companies
These digital assets will transfer to your beneficiary or beneficiaries.
If the conditions of the licensing agreement permit transfer upon death, you could also use your will to transfer digital assets that you have licensed, such as a domain name or copyright.
Digital Assets That Cannot Pass Through Your Will
Most of your digital assets won’t pass through your will, either because you lack the legal authority to transfer them or because they don’t have a monetary or tangible worth.
These non-transferable digital assets may often value you, your family, or your executor because they are helpful or emotional to them.
Examples of digital assets that will not be included in your will are:
Your registered domains for social networking and email accounts such as Spotify or Netflix subscription services, tax, or financial software.
Here is the basic guideline: If it’s not worth the money or you don’t own it, you can’t pass it through your will. Even if you are unable to leave these kinds of digital assets through your will, you should still make plans for what will happen to them when you pass away, such as including digital assets in estate plan or managing them using online will services to give an executor access to these assets.
Estate Planning Tips for Digital Assets
By making advance arrangements, you may guarantee complete access to your digital property, reduce administrative expenses, and ensure that no essential or priceless digital asset is missing.
Consider these four tips during estate planning:
Make a list of your digital assets to let your family and friends know what you have and where it is. Include all your crucial login information for internet services, such as email and social media accounts, including domain names, virtual currency, and money transfer apps. Make sure your family members know where to find your list and how to access it.
Using Clock to store cryptographic and other virtual currency passwords and keys can help prevent digital theft and fraud with its security features and data encryption.
Know what you possess:
In some instances, you may have assumed you were buying a digital asset when you bought a non-transferable license to use the item. Additionally, there could be restrictions like the maximum number of times you can burn the song to a CD.
To determine if a vendor is selling the asset itself or only a license to it, check the terms of the deal before adding it to your will.
Back up your cloud-based data:
Suppose you keep any digital assets in the cloud and regularly back up those assets to a local computer or storage device to make it easier for family members and fiduciaries to access them. Some businesses offer simple access that allows you to save all of your data to a computer. It simplifies the process of passing digital assets through a will and restricts access to only authorized personnel.
Clocr is a secure online safe deposit box that may be used to store digital backups of important documents that have been electronically scanned, including tax records, wills, birth certificates, insurance policies, and bank and investment account statements.
State your consent in legal documents:
Update your wills, powers of attorney, and any revocable living trusts with the help of an estate planning lawyer. They should contain the terms granting executors the legal right to reveal the details of your digital assets to the appropriate parties. Consider which information specifically you want to make available as well.
Your Executor's Access Your Digital Assets
An executor’s ability to legally manage your digital property can be limited by federal and state legislation, whether you leave instructions for accessing your accounts and information, and the terms of service agreements for each asset.
An executor must consider the digital assets when determining the size and worth of an estate. In many circumstances, this will include deciding which digital data would interest relatives or friends, deleting those that aren’t, and shutting down any essential internet accounts.
In other situations, executors must assign a value to digital assets and allocate them to beneficiaries. To pay bills, divide property, or carry out directions you give for what to do with your digital assets, your executor may require access to the same. A competent online will service can grant your executor access to help them perform their tasks seamlessly.
End Verdict: Efficient Estate Planning and Will Services
Can a will be stored digitally? Maintaining a well-structured estate with an online will service that efficiently tracks and allocates the necessary access can be very handy to ensure that your digital assets clause in a will are in the right hands and executed well.
Through Clocr’s Digital Estate Solutions and Online Digital Will services, your executor is permitted to access and manage all of your digital assets in a will, including financial accounts, email, social media, blogs, and online file storage.