How to Incorporate Digital Assets into Your Estate Plan
Digital assets are an integral part of modern life. From cryptocurrency and online banking accounts to email accounts, social media profiles, and even cloud storage, digital assets have considerable value whether financial, sentimental, or both.
However, despite their importance, many people overlook them when creating their estate plans, making it challenging for loved ones or fiduciaries to handle them after death. At North Carolina Estate Planning & Fiduciary Law, we aim to address these often-overlooked aspects of estate planning with precision and care.
Digital assets often involve specific permissions, rapidly evolving laws, and unique security measures. We can help you identify, organize, and document these assets so they are accounted for in your estate plan. Our experienced estate planning attorneys serve clients in Charlotte, North Carolina.
What Are Digital Assets?
Digital assets are electronic resources, often linked to accounts with usernames and passwords. These can generally be divided into the following categories:
Financial digital assets: Cryptocurrency, online bank accounts, PayPal balances, investment accounts, and reward points with monetary value.
Personal digital assets: Photos, videos, and files stored in the cloud, as well as email accounts, blogs, and social media profiles.
Business digital assets: Websites, domain names, intellectual property, online storefronts, or other online resources that generate income.
These assets can vary widely in value. Some may have tangible monetary worth, such as Bitcoin or reward points, while others, such as family photos, provide sentimental value. Regardless of type, they require a thoughtful approach in estate planning to make them accessible to your heirs.
Including Digital Assets in Your Estate Plan
Digital assets can be difficult for family members or fiduciaries to access after the account owner passes. Without clear instructions or legal guidance, they can remain locked or even disappear entirely.
Including your digital assets in your estate plan prevents issues like lost access, disputes among heirs, or complications due to unclear ownership rights. Handling them properly allows your loved ones to access what truly matters while respecting privacy and preventing the misuse of accounts.
How to Incorporate Digital Assets into Your Estate Plan
When it comes to creating your estate plan, it's important to make sure you include any digital assets you may have. To include digital assets into an estate plan, consider the following:
Create a Detailed Inventory of Digital Assets
List your digital assets, including account login details, usernames, passwords, and security questions. Be thorough—don’t overlook seldom-used accounts or online subscriptions. Store the inventory in a secure location, such as with your attorney or in a password-protected file, rather than in the will. Wills eventually become public documents, and exposing private information could pave the way for fraud.
Specify How Each Asset Should Be Managed
Clearly mention how you want each asset handled. Should family members have access to photos stored in the cloud? Would you prefer that certain social media profiles remain memorialized or be deleted? Think about how each type of asset should be accessed or allocated.
Appoint a Digital Executor
North Carolina allows individuals to appoint fiduciaries to manage digital property. While your overall executor will handle key aspects of your estate, you might consider appointing a “digital executor” to focus on digital assets. This person should be someone you trust, who is tech-savvy and knows how to access and manage digital content.
Leverage a Durable Power of Attorney
Draft a comprehensive durable power of attorney that explicitly grants access to your digital assets. This document allows your authorized agent to manage your digital accounts and property during your lifetime in the event you become incapacitated and after you pass away.
Include Digital Assets in Your Trust
For privacy or ease of transfer, consider placing your digital property in a trust. A trust can ensure that your digital assets are managed according to your wishes, avoiding probate and keeping sensitive accounts private.
Check Each Platform’s Terms of Service and Settings
Digital platforms like Google, Facebook, and Apple offer tools to manage accounts posthumously. These features allow you to designate trusted contacts or specify access rules for your accounts after death. Research and use these options wherever available.
Keep Everything Updated
Review and update your inventory regularly. Login credentials, accounts, and the value of your digital assets can change over time. A dynamic inventory keeps your estate plan current and relevant.
What North Carolina Law Says About Digital Assets
North Carolina follows the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which allows fiduciaries to manage digital assets. This includes executors, trustees, and agents acting under a power of attorney.
However, access isn’t guaranteed. Fiduciaries must be explicitly authorized in your estate planning documents to access your digital property without questions or conflicts. The act also makes room for the terms of service agreements of digital platforms to prevail in certain situations. Your estate plan should align with the rules of each platform where your data or accounts reside.
Estate Planning & Fiduciary Law Attorneys in Charlotte, North Carolina
At North Carolina Estate Planning & Fiduciary Law, we work with individuals, families, and designated agents to manage your trust, estate, or digital assets. From proactive estate planning to trust administration and understanding tax laws, our legal services are tailored to your needs. To incorporate digital accounts into your plan and address unexpected challenges, schedule a confidential consultation at our Charlotte, North Carolina office.