Handling Digital Assets and Special Assets in Trust or Estate Administration

On Behalf of | Aug 7, 2021 | Firm News

When you are estate planning, it is essential to make plans for digital and other special assets. These days, almost everyone owns some form of a digital asset. It is crucial to understand the terms of use for your digital assets regarding access and control of the data and ensure that you properly include any digital assets in your estate plans.

If you have questions about handling digital and special assets in trust or estate administration, the attorneys at Galanti and Copenhaver can help. Our estate planning attorneys have many years of experience handling all aspects of estate planning—from creating initial estate plans to assisting with trust or estate administration.

What Are Digital Assets?

Digital assets are things that you own that exist digitally. Many things can be classified as digital assets. Digital assets include domain names, email addresses, social media accounts, crypto and virtual currencies, and electronically stored videos and photos. Other examples of digital assets include:

  • Digital rights to manuscripts, motion pictures, or literary works
  • Blogs and blog content
  • Online betting accounts
  • Monetized online video channels
  • Online gaming accounts with items worth real money
  • Credit card rewards
  • Digital trademarks or copyrights
  • Documents and information that are stored in the cloud

Common Issues That Arise When Handling Digital Assets in Trust or Estate Administration

A few different issues often arise when it comes to handling digital assets during trust or estate administration. These issues include:

1. Password Access

Ideally, the decedent’s trust or estate documents will include a list of digital asset account information and passwords. However, this can be a tricky issue to deal with as an administrator of the estate.

Most people use multiple passwords, and there are so many different digital asset accounts that the estate documents may not properly include everything you will need. If everything is not included in the estate documents, you may need the assistance of family members or experts.

2. Data Privacy and Criminal Laws

Another issue you may need to deal with during the administration of a trust or estate is applicable data privacy and criminal laws. There are state and federal criminal laws in place that are meant to protect people from identity theft and other types of fraud—but these laws may also impact digital assets in trust or estate administration.

There are also federal data privacy laws in place that prohibit online account service providers from giving up the contents of electronic communications to anyone other than the owner of the account. However, if the owner gives lawful consent to allow access, then this may not be a concern for estate administration purposes.

The trust and estate documents may include terms for allowing access to others after the decedent’s passing. Additionally, some online account service providers allow the owner of the account to predesignate someone entitled to access the account in the event of their death or incapacitation.

Data Encryption

Another potential hurdle that the administrator of a trust or estate should be aware of and ready to deal with is data encryption. Data that is digitally stored can be encrypted. This adds another layer of protection on top of passwords.

Encryption can scramble data to such an extent that it is nearly impossible for anyone without the correct password to access the data. If the decedent’s digital assets are protected by data encryption and inaccessible, you may need to involve an expert to gain access to the assets.

Why Should Digital Assets Be Included in Estate Plans?

Every estate plan should include all digital assets. Having a plan for digital and other special assets will make it easier for your loved ones when it comes time for them to retrieve and secure these assets after you pass away.

By including your digital assets and their retrieval information in your estate plan, it will cut down on time and the stress of locating all of your passwords and accounts. Another reason to include digital assets in your estate plan is to protect income streams that your digital assets generate, such as revenues from online businesses and social media, and other income-generating accounts.

Having a plan for your digital assets will also give your beneficiaries and family members legal standing to access these digital assets. There are some state and federal laws that make accessing private data or computer systems without permission a crime. With these matters addressed in your estate plan, you will be able to provide legal protection for your loved ones and those handling the administration of your trust or estate.