Don’t Overlook Digital Assets When Making Your Estate Plan

So much of our life is online now, when someone passes away, the process of assembling assets for their estate often requires access to a series of accounts and passwords rather than a key to a safe deposit box or locked desk drawer. Many people have significant holdings in cryptocurrency, non-fungible tokens and other forms of virtual assets. Even if you haven’t purchased Bitcoin or something similar, you might have digital property that could cause complications for your loved ones if you’re not careful with your estate plan. 

A comprehensive estate planning program should identify digital property and provide clear instructions for its management and disposition to avoid loss, disputes and unnecessary expense. Beyond Bitcoin and other cryptocurrencies, digital assets include online banking and brokerage accounts, social media profiles, cloud storage, domain names and websites. Though some assets are held by a third-party provider, others depend entirely on private keys or seed phrases, and can be irretrievable if lost.

One way to avert problems is to create a detailed inventory of information that can accompany your will or trust. You should prepare a comprehensive list of user names and passwords and secure them through a password manager or some other method, with instructions to your executor on how to obtain the credentials upon your death or incapacity. Many password managers offer heir or emergency access that protects private information until the need arises. Your testamentary documents should expressly grant authority to access and manage digital assets, subject to applicable law and provider terms.

Different types of cryptocurrency might have more complex procedures regarding access by non-owners. Make sure you have a thorough understanding of the applicable rules if you possess these digital assets. It’s also wise to address your social media footprint. Most of the major platforms have legacy settings and contact features that give you the chance to have your profile deleted upon your death, or have control transferred to someone you designate. 

Managing the disposition of digital assets requires both technical awareness and clear legal authority. An estate planning attorney who understands these issues can help you make sure that nothing important is missed.  

Chapdelaine, Ryan & Associates in Winthrop provides personalized counsel on the development of wills, trusts and other estate planning instruments. We can review your overall situation and devise a strategy that addresses digital assets and other complex concerns. For a consultation, please call 617-870-6728 or contact us online.