Estate Planning for Digital Assets
One of the topics we regularly talk about is adaptive estate planning and how your plan needs to evolve with you as life changes. People often think this merely means they need to update their plan when they buy a house, a family member gets married, someone has a kid, etc. These are all important moments to update your plan, but a truly adaptive estate plan also involves understanding modern assets – specifically digital assets.
We live in a digital age. There are more and more ways to make money through the purchase and management of digital assets. But, if your estate plan fails to account for these digital assets then the value of those assets and your digital footprint could be out of the control of your loved ones or, even worse, lost forever. We want to help the people of Wisconsin effectively include and manage digital assets within their estate plans.
Estate Planning for Cryptocurrency and NFTs
Cryptocurrency and Non-Fungible Tokens (NFTs) are somewhat of a new frontier in asset accumulation. These rapidly growing investment tools are becoming more elemental in estate planning conversations. Ultimately, the most critical aspect of planning for such assets lies in ensuring access to the necessary passwords and identifying information to locate the assets.
If you were to pass away without providing access to your crypto wallet, its value might be irretrievably lost (there are numerous stories of valuable Bitcoin wallets being lost forever due to forgotten passwords). The same holds true for NFTs stored on blockchain technology. It’s imperative that you designate someone who can access and then transfer or liquidate these assets, preserving their value for your beneficiaries.
Additionally, certain crypto markets/wallets, like Crypto.com, have their own policies in place for what happens when an executor contacts them after an owner passes away. It’s important to understand the policy of the market you’re in and plan accordingly.
Estate Planning for Digital Financial and Investment Accounts
The shift of investment portfolios into the digital world has impacted the way we plan for these assets. Digital-only financial institutions are becoming more common, highlighting the need for clear parameters in your estate planning to handle these accounts effectively.
In the case of digital-based investments, the planning needs are twofold:
- Ensure you are updating any beneficiary or transfer on death designations within the accounts
- Ensure your estate plan reflects that information or, in the case that those designations are not available, covers the information necessary
These accounts are viewed mostly the same as traditional accounts, but we’re seeing more and more financial institutions that have no physical locations and exist exclusively online. If that’s the case with your investments, then it’s important to make sure you have parameters in place to account for them.
Estate Planning for Social Media and Digital Media
Do you want your social media pages wiped out when you die? Do you want your pages to be managed or updated by loved ones? Whatever you want to have happen, it’s important to plan ahead. Certain websites like Facebook allow you to appoint what is called a “Legacy Contact” that will take over your account at the time of your death. You should take advantage of this to protect your reputation and legacy after you pass away.
On top of this, you should make sure that individual understands what your wishes are with your social media. Whatever you want to happen with your social and digital media accounts needs to be properly communicated in advance to ensure your wishes are honored when you’re no longer here.
Manage Your Digital Assets with Elder Advisors Law
At Elder Advisors Law, we understand the demands of modern estate planning, including how to manage digital assets in your plan. We are well-equipped to help the people of Wisconsin with a forward-thinking approach to securing their digital legacies through effective estate planning. Our team is tech-savvy and knowledgeable in these matters. For guidance on safeguarding your digital assets, contact our offices in Janesville or Wales today.
