Estate Planning And Digital Assets
As technology changes, so does the law, and estate planning must as well. Digital assets are becoming more common, even for elderly people, and like any tangible asset based in the real world, you must have a plan for their management upon your passing. Failure to do so may mean that your accounts and intellectual property rights, among other items, languish in cyberspace without any way for your beneficiaries to get them back.
Issues With Digital Bequests
A digital asset is anything that exists (primarily) in virtual space, on the internet. They can have financial value, or they can be more sentimental in nature – for example, online investment accounts versus social media accounts or e-mails. Intellectual property items or rights to digital content are less common, but can also have a high monetary value. Other assets are more difficult to define, such as cryptocurrencies or reward points with businesses.
In theory, one should be able to will digital assets to beneficiaries just like any other regular asset based in the real world. However, there are issues that occur with digital assets that do not occur otherwise – for example, beneficiaries are much less likely to know about digital assets’ existence, or if they do, it is unlikely that they have access to the relevant account. Florida does have a law on the books as of this writing which governs fiduciary access to digital accounts, but there is not much law governing the wider issues around these assets.
Potential Tax Issues
Dealing with digital assets can seem overwhelming, but it is important that you do so for the benefit of your heirs. One other way that this applies is in dealing with federal tax issues. Florida does not have an estate tax for estates where the decedent passed away after January 1, 2005 – but federal estate tax is owed if your assets are valued over a certain amount. Digital assets are necessarily a part of your probate estate, and must be valued appropriately in order to arrive at your appropriate tax burden.
In general, the best way to avoid these issues for your digital assets is to include them in your estate plan from the beginning. For example, most websites based in the U.S. have prohibitions against disclosing account information without the account holder’s express consent (or a court order), but if you include your consent in your estate plan, it can greatly lower the amount of time and effort that your personal representative or your beneficiaries have to spend in accessing your accounts.
Contact A Naples Estate Planning Attorney
If you have questions, concerns or just want to set up a complimentary consultation to discuss your personal legal issues in a confidential setting, contact James R. Nici, the Managing Partner of Nici Law Firm, a Naples estate planning attorney with almost 30 years of legal experience. This may be the first step toward ensuring all is how you want it to be going forward. Contact our offices today via our website, or on the telephone at 239-449-6150, to schedule your complimentary consultation.