Most people use some form of digital/virtual banking in their everyday lives. While those digital assets can often be used in the same manner as cash and credit, they need to be addressed in a unique manner when it comes to estate planning. Most people with estate documents have not accounted for how their loved ones will access their digital assets should something happen to them.
Typically, access to digital assets requires a specific username, PIN, and/or password. If those access codes are not provided to a loved one before your death, your loved one may be required to jump through numerous hoops to access such assets, or your assets could die with you. To avoid this, the issue of digital assets should be addressed in your estate documents. Your power of attorney should grant your agent the power to access and manage your digital assets, and your will should reference your digital assets and contain the access codes for purposes of probating such assets.
Making future plans for your digital assets becomes even more important when it comes to cryptocurrency. Cryptocurrency is a virtual currency that uses cryptography for security. The most popular form of cryptocurrency is Bitcoin. Unlike other digital assets, cryptocurrency is not maintained by banks or the federal government. Cryptocurrency is typically anonymous; it does not require a name in order to obtain. Rather, owners of cryptocurrency have a special key that must be used to access the currency. If a loved one does not have this key when you die or become incapacitated, your cryptocurrency may be lost to them. Unlike online banking accounts and mobile banking apps, there is no customer service department to call if an individual is unable to access your cryptocurrency in the event of your death.
This article by Forbes provides deeper insight into the issue of estate planning and digital assets, including cryptocurrency. If you already have an estate plan, now is a good time to revisit it to ensure that it accounts for your digital assets, especially if you have invested in cryptocurrency. If you do not yet have an estate plan in place, now may be a good time to create one.
Please contact our firm with questions or to discuss your digital estate planning needs.