As technology continues to advance, it makes sense that estate planning does as well. Today, not only do we have to worry about what will happen to our homes, personal collections, and other types of assets when we pass away, but we also have to consider our digital assets. Yet, many people fail to recognize that their digital footprint should also be a part of their long-term financial planning. If you want to learn more about how to handle your digital assets within your estate plan, contact an experienced Arizona estate planning lawyer at Harrison Law, PLLC, by calling (480) 320-2310 today.
What Are Digital Assets in Estate Planning?
According to Arizona’s Revised Statutes, a digital asset is an electronic record to which the user has a right or interest in. While many people may assume this record only refers to files on a device such as a phone or a computer, digital assets can also extend to include:
- Electronic financial accounts and cloud accounts
- Email accounts
- Social media accounts (Facebook, Twitter, Instagram, LinkedIn)
- Non-fungible tokens (NFTs)
- Cryptocurrency
- Digital photos and videos
- Blog content
- Domain names for websites
- Online video channels that are producing and advertising revenue stream
- Online gaming avatars that may be worth real-world money
- Betting accounts
- Convertible virtual currency
- Digital music (iTunes)
- Frequent flyer miles
- Marketplace accounts such as Amazon
However, to better understand these digital assets and whether you have any, consider discussing the matter with an experienced Arizona estate planning lawyer at Harrison Law, PLLC. Our knowledgeable legal team can review with you all your possessions, including all your digital assets, and determine what these assets can mean for your estate plan.
Should I Include Digital Assets in My Will?
In Arizona, while you can include digital assets in your Last Will and Testament (Will) before you start listing all these assets and writing down your private passwords and other sensitive information, you may first want to exercise some caution. A Will becomes public when it goes through probate, and you may not want your family to deal with your sensitive account information. There are safe ways to include your digital assets in your estate planning documents. Consider visiting with an estate planning attorney to learn more.
Are Digital Assets Considered Property?
According to the Internal Revenue Service, some digital assets are treated as property, meaning that tax principles that apply to property transactions also apply to digital asset transactions. Individuals may also have to report their digital asset activity on their tax returns in certain instances.
However, while digital assets may be treated as property, they pose their own problems, especially when it comes to access. For instance, compared to many other types of capital or property, digital assets often need specific proprietary information, including a password, user name, or a Personal Identification Number (PIN) to access the data. If heirs or loved ones do not have this information after a person passes away, they may not be able to gain access to the digital assets meant for them. Fortunately, going over your digital assets in an estate plan can help make sure that your beneficiaries have the legal authority to these assets and can access them when needed.
Can You Inherit Digital Assets?
Digital assets can be inherited as long as they are fully owned and transferable. Digital inheritance refers to the transfer of digital assets to beneficiaries after a person dies as part of their inheritance. Digital inheritance also allows beneficiaries to be granted access to critical passwords if something unforeseen happens. However, if individuals do not plan ahead, they risk their information being exposed to the wrong people.
If you want to protect your digital assets, consider discussing your situation with an experienced Arizona estate planning lawyer, who can make sure that the people you trust are the only ones who get access to your accounts and sensitive information.
What Happens When You Do Not Create a Plan for Your Digital Assets
Digital privacy laws help control how online data is stored, shared, and used. These laws also prohibit online providers from granting access to certain data to anyone other than the owner without the owner’s consent. Consequently, if an individual passes away before giving access to this information, it can become especially difficult for heirs to gain access to this data and assets. While this may not be a challenge when it comes to certain accounts, such as social media logins, it becomes a much bigger problem when trying to gain access to more valuable assets like intellectual property or financial accounts.
If you want to prevent your loved ones from going through this challenging ordeal, consider going over all your digital assets with a knowledgeable Arizona estate planning lawyer. An experienced attorney can help you determine how to pass on these assets to your loved ones without having to deal with digital privacy legal battles.
Protect Your Privacy Instead of Granting Access
Although some individuals want to make sure their digital assets, including their passwords, are shared with their beneficiaries when they pass away, others may want to ensure that these assets and information are kept private.
If you would rather have your digital assets stay private, it is important to create specific documents that help make sure that individuals do not gain access to these accounts, and your privacy is maintained no matter what happens.
Protect Your Digital Assets by Reaching Out To a Knowledgeable Arizona Estate Planning Lawyer
For further information regarding digital assets and estate planning, contact Harrison Law, PLLC, by calling (480) 320-2310. Our experienced legal professionals can answer the questions you have regarding your digital assets and assist you in developing an estate plan that can help ensure your digital assets are protected.
© 2023 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
