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What exactly counts as a digital asset?
Making a solid estate plan is always a sound idea to prepare for the unexpected. However, many people can forget to include their digital assets in their estate planning. This is a crucial part of estate planning, now more than ever. In the digital age, we often don’t realize just how many of these assets we own. But what exactly qualifies as a digital asset?
The IRS’s official website defines a digital asset as “any digital representation of value recorded on a cryptographically secured, distributed ledger (blockchain) or similar technology.” In short, it is anything that can be considered property in a digital form. It is important to note that digital assets go beyond just cryptocurrency or anything of direct monetary value. These assets include but are not limited to:
– Cloud-based storage accounts (Google Drive, OneDrive, Dropbox, etc.)
– Email accounts (Gmail, Yahoo Mail, outlook, etc.)
– Photos, videos, or audio files
– Documents or Design Files
– Reward accounts (from credit cards, health insurance, etc.)
– Online accounts (such as gaming accounts)
– Online Shopping accounts (Walmart, Amazon, eBay, etc.)
– Online Banking accounts
Correctly identifying and organizing your digital assets is the first step in successfully including them in your estate plan. If you are still unsure what qualifies as a digital asset, call AVID Esq. Group, LLC, at 480-467-5636 today to speak directly to a legal representative about your estate planning needs.
What is the best way to protect your digital assets in Arizona?
Now that we’ve identified common examples of digital assets, what is the best way to include them in your estate plan? Simply put, you can incorporate digital assets in your estate plan by listing and detailing how you want your digital assets to be handled. This includes listing not only all of the assets themselves but also a comprehensive list of all the corresponding usernames and passwords for each of the necessary accounts or websites.
Once all of your assets have been listed and accounted for with all of the necessary information, the next step is to designate who you want to be in charge of and have access to your digital assets if you are incapacitated. This person should be someone you trust not only with essential matters but also someone who is comfortable using the technology through which you access your assets. Be it a phone, a laptop, a tablet, or any other device that needs to be used to use or obtain your assets; the designated person should have prior knowledge of said devices and accounts.
Lastly, it is best to be as specific as possible when including all of this information in your estate plan. This means to explain in detail if you want each asset to be stored safely or deleted, to who each asset will belong to, and any other additional information you might want to include about each digital asset.
What happens to digital assets if they are not listed in an Arizona estate plan?
If digital assets are not listed or accounted for in your estate plan, many unpredictable things can happen to them. At best, your assigned personal representative of your estate plan will have to decide what to do with these assets. With a lack of instruction or necessary information, however, it can be complicated for your personal representative to fulfill your wishes. At worst, digital assets that you may want to have preserved or given to someone else may get lost during the process. This could even potentially include digital assets that hold monetary value. Even worse yet, someone might mismanage these digital assets, which can cause incredible stress for your loved ones in an already emotionally challenging situation.
If you want to avoid these circumstances, it is always best to prepare accordingly. This means not only thinking about your digital assets ahead of time and including them carefully in your estate planning but also updating them regularly with critical information. For example, suppose you included all of your username and password information of all your digital accounts in your estate plan but have since changed passwords (some accounts or websites require you to change passwords every certain amount of time). In that case, you must take care to also update the information in your estate plan. Otherwise, you risk mismanagement of your assets, as stated before.
What is the next step?
It is entirely understandable if you are still undecided on how to best manage your digital assets in regard to your estate plan. Estate planning is a delicate subject for many, and it’s a matter that needs to be handled with care and thoroughness. Digital assets are a relatively recent development for estate planning, and many people can be easily misinformed about procedures surrounding the topic. It is always best to speak to an attorney or legal representative about the subject. AVID Esq. Group, LLC highly values your estate planning needs, offering flat fee packages with no upcharge. With AVID Esq. Group, LLC., you will always have someone to go to for your estate plan concerns. Get in contact today by calling 480-467-5636 or visit the website.
