Estate planning for digital assets can become complicated. As these assets become more common for Americans, it is important to know how they work and if there are any special considerations.
For example, cryptocurrency can be a very valuable digital asset. This is an online currency, but people will often invest in it using USD, and it can gain significant value.
You can often include a cryptocurrency account in your estate plan. This can leave a significant amount of wealth to your beneficiaries.
However, be sure that you also leave them the correct login information so that they can access the digital wallet and obtain the funds. If you do not do so, even if the wallet is technically left in their possession, they may not be able to spend the cryptocurrency or remove the same value in USD. This is much different than simply leaving someone access to a bank account, which you could do through a payable-on-death account or by giving access to the estate executor.
Some assets cannot be included
Another thing to consider is that certain digital products cannot be included in your estate plan to begin with.
For instance, many people who purchase digital products like movies are actually just purchasing a license. They do not own the movie itself, at least not in the same way that you would own a DVD or a VHS cassette. When a person passes away, the license to that content expires. A collection of digital movies, video games or music may have cost a significant amount of money upfront, but those assets cannot necessarily be left to the next generation.
Exactly what steps you will need to take as you make your estate plan depend on the digital assets that you own and your goals for them in that plan, but just be sure you understand the complexities of the situation and the legal options you have.
