Due to the constant evolution of technology, it is important to incorporate plans for your digital assets in your estate plans. Digital assets may not be the first thing that comes to mind when you start to prepare estate plans, but these assets must be accounted for. Some digital assets are personally valuable, while others may hold a significant financial value.
The California estate planning attorneys at Galanti and Copenhaver are here to help you prepare all of your estate plans, including planning for your digital assets. Our attorneys have many years of experience handling all different types of estate planning, including cases involving litigation. Give our office a call today to set up a consultation to meet with one of our attorneys to discuss your questions and concerns regarding estate planning for your digital assets, along with any other estate planning-related needs you may have.
What Are Digital Assets?
The California Probate Code defines a digital asset as “an electronic record in which an individual has a right or interest. The term “digital asset” does not include an underlying asset or liability, unless the asset or liability is itself an electronic record.”
Digital assets fall within a broad category. Digital assets can include anything from your Facebook account to your cryptocurrency accounts. Before meeting with your attorney to prepare your estate plans, it can be helpful to compile a list of all of your accounts, logins, and passwords so that these accounts can be included in your planning.
Some examples of digital assets include:
A personal blog
Cryptocurrency accounts, such as Bitcoin, Ethereum, Litecoin, and other forms of cryptocurrency
YouTube account and associated videos
The Revised Uniform Fiduciary Access to Digital Assets Act and How It Impacts Digital Assets in California
The Revised Uniform Fiduciary Access to Digital Assets Act was signed into law in 2017. This Act added additional sections to the California Probate Code to address the issues associated with digital assets. Under this law, there are two ways that you can opt to give or limit access to your digital assets. When you choose to give someone access to these assets, it does not necessarily mean that you are giving them free rein to all of your assets. Rather, you have the ability to pick and choose what you wish to allow them to access.
Interested in learning more about estate planning for special assets? Check out this blog.
Creating an Agreement with Directions for Disclosure or Non-disclosure of Your Digital Assets
The first method of allowing access is through an agreement that is separate from any terms-of-service agreement already existing between you and the online service provider. This agreement provides directions for either disclosure or non-disclosure of your digital assets to a third party. An example of this in a commonly used form of social media is the legacy contact system in place with Facebook. Facebook allows you to choose another person during your lifetime who can manage your account in the event of your death. This legacy contact will have the authority to download a copy of everything you shared on Facebook.
Include Disclosure or Non-disclosure of Digital Asset Plans in Your Estate Planning
The second method of allowing (or prohibiting) access to digital assets is to specifically state your wishes in the terms of your will, power of attorney, trust, or other record. If you choose this method, keep in mind that it will only allow your authorized fiduciary to access your digital assets. Additionally, if your will ends up passing through probate, your passwords and other private information will become public record, so this is something to consider when making your estate plans.
When you use either of these methods, you effectively override any directions that you had agreed to in any terms-of-service agreements. This can be useful in certain situations. For example, assume that when you signed up for an e-mail account, you automatically agreed to have your online data deleted upon your death. If over time, your e-mail account ended up containing valuable information that you would want to pass on upon your death, you would need to have completed one of the above methods in order to avoid having the account entirely deleted upon your death.
As you begin the process of estate planning, be sure to keep your digital assets in mind. It is always a good idea to make a list of your digital assets and decide how you want each to be handled upon your death. To learn more about estate planning for digital assets, contact us today at Galanti and Copenhaver.