What is a “digital asset”? And, why does it matter to you?
Digital assets are non-tangible things you own (assets) that tend to live on or in the Internet “digital”. Tangible assets like cars, hours, or money can be transferred by deed or title. Digital assets are much hard to transfer or for some even to conceptualize.
Three Different types of Digital Assets
I like to think about three types of digital assets.
One is passwords, or secrets, that you use to access your digital assets, and are digital assets themselves.
The second is social media, including Facebook, Twitter, and other sites. This also may include your email or website. This type of asset contains information that is specific to you (pictures, email conversations, and so on) that are your “assets”.
The third type is a new idea … that is digital currency, also known as “cryptocurrency“.
Passwords and other secrets
For example, think about your bank account. If you use on-line access, the password and the “access” to the account could be considered a Digital Asset. When you actually remember the password, access is easy. If you forget it, it is harder, but recovery can be easy if you recall the answers to secret questions. But, you might forget those too, making recovery much harder. A solution is to use a password manager or to simply write it down. What is the “best” appraoch? I can assist you in thinking through what makes sense for you.
Here is a video that goes into a little more depth…
Another type of digital asset is your social media accounts. If you have an email account, or Facebook or Twitter, and you have ever posted or emailed anything .. those are your digital assets. When you die, you’d probably like them to be turned off, deleted, or sent to your heirs, right? Well, a “digital executor” can be named to do this. Recent changes in North Carolina law to adopt the Uniform Power of Attorney act (which is a body of law that hopes to commonize laws across the 50 states) includes Digital Executor provisions.
Our office can assist you in getting this set up for you, by adding the appropriate provisions to your will and/or financial Power of Attorney documents. Visit the office today!
The third type of digital asset is more like the traditional assets we leave to heirs. But, it is fundamentally different in complex and intriguing ways.
One of the key differences is that it is by nature very secret and very protected.
You can see the bank, or you receive bank statements, and accounts show up ion your credit report. That means that your executor or agents can figure out what you own. But secret accounts just do not show up anywhere! And, the asset itself might reside as a token on a hardware “wallet” that looks like a little flash drive… Some families have been known to throw away the “flash drive” not realizing that it contained thousands of dollars of real digital currency! Here is a short video that highlights a few areas of interest in crypto currencies.
Don’t let this be you!
Call our office at 919-883-2800 to schedule a meeting to discuss your crypto-currency and learn how to protect it while also making it available to your heirs.
Why does this matter in Estate Planning?
You need to know that your assets transfer to the people you want, in the way you want, and in the amounts and duration that you want. While traditional wills and trusts do this just fine for traditional assets, digital assets make this harder and more complex.
Standard approaches just don’t work.
Call us today for help and to get the
digital assets in your life squared away!