Physical assets like a house, cash, bank accounts, etc. are no longer the only portfolio to a person’s legacy. Nowadays, it’s digital assets that can significantly contribute to a person’s overall “wealth” and legacy. This “wealth” is a topic that can easily confuse and overwhelm many, as they navigate through new digital platforms, technologies and wealth creation.
If You Own:
- Crytocurrency accounts
- Social media accounts like Facebook, Instagram, Snapchat, etc.
- Personal files, photos or videos on Google Drive, Dropbox, etc.
You will need to provide your heirs access information, so that they will be able to access your digital assets.
Financial Digital Assets
These include monetary wealth acquired from digital currencies e.g. investments or trade in cryptocurrencies like Bitcoin, Ethereum Ripple, Litecoin.
Sentimental Digital Assets
Digital assets include items of sentimental wealth— items that are not worth any money, but contribute to the legacy and life of a person. These items can include email accounts, social media handles on Facebook, Twitter, Instagram, Snapchat, etc., cloud accounts, and even on-device data e.g. smartphones, tablets or computers.
In the Event of Death
Upon death what happens to these digital assets? You may have a substantial amounts in your Bitcoin account or other digital currency, photos and videos on your phone and an active Facebook account which may contain sentimental videos and photos. How will your executors navigate through your “stuff” to distribute it to your beneficiaries?
Actions to Safeguard your Digital Assets
The first step is to get an estate plan in place (regardless of whether you have digital assets or not), but with digital assets, ensure that your estate planning attorney knows how to integrate, document and update the information within your estate plan.
The executor of your estate will need to access your accounts, which means usernames, passwords, 2 –Step Authentication codes and access should be clearly mapped out. The risk in not doing so means zero access to both types of digital assets and any wealth gained in cryptocurrency will simply be lost.
Cryptocurrencies are secured in a way traditional currencies are not. It is important to know how to access cryptocurrency assets once the account holder passes away, since they are monetary assets—much like printed currency. Cryptocurrencies are typically protected by a “key”— read our previous Blog here.
In California, creating an estate plan is crucial for some, in order to avoid probate. However, families may still find themselves in probate court litigating their inheritance and fighting between siblings. With something as intangible as digital assets, the burden of proof can swing judicial decisions. If there is no access to an account or documentation in some shape or form, it will be a tough to assert ownership.
Although we do provide superior estate litigation services, Velasco Law Group focuses more on keeping families out of litigation. Our objective is to preserve and protect your wealth. Digital assets are an important element in our everyday lives; our children have grown up in a digital world. The future is shaped around the internet, the cloud, and the worldwide web. You should protect wealth and understand how to leave behind your digital assets and legacy. Velasco Law Group can help guide you through the estate planning process.
Our law firm is dedicated to keeping up with important trends that affect families and businesses. Velasco Law Group has offices in Long Beach, Downey and Irvine. We have a team of English and Spanish speaking attorneys and paralegals to assist you. Our initial consultations are complimentary. Find out more about how you can protect your digital assets at any one of our office locations. Call 562-432-5541 to schedule an appointment.