Very little of our lives are free from digitization. Our socialization has taken to social media and livelihoods to the Internet. Another facet of our lives that exists in the online space? Assets.
What type of property constitutes a digital asset? People may immediately envision their online bank accounts. Technically this is a digital asset, but, most people already take measures to protect their bank accounts, whether they use online banking or not.
The truth is, there is no legally-accepted definition. The simplest explanation of a digital asset is “content owned in digital form.” This makes sense, but may not do justice to the valuable digital components of an estate.
Perhaps the first area to dissect is in digital content. Digital content includes images, photos, videos, and text files. Another type of digital asset is, of course, the bitcoin. Bitcoins are an electronic currency, and the “virtual banking of the Internet.”
Even though people are making everyday purchases with their bitcoins, the IRS doesn’t yet consider bitcoins currency, but rather personal property. Bitcoins are stored online in two different ways: in online wallets and via a block-chain. One of the biggest reasons people opt to use bitcoins over traditional currency is for autonomy. As such, unless a person makes a point to identify the bitcoins they own in estate planning documents, they could get lost.
Online accounts including email, social media accounts, photo accounts (like Dropbox), managed websites and blogs are also digital assets.
What’s important to remember is the assets needn’t possess outward monetary value—though in some cases they may. A person may desire the continuation of his/her website, for example and know whom they’d like to take over in the event of death. Websites and blogs are typically password protected, and unless this is a conversation that’s been had with a future digital executor, the website would likely be left untended.
Decades ago, families designated boxes of family relics to pass along to certain family members. Now, these relics, such as photos, are stored online in the Cloud. Does that mean that they shouldn’t receive similar management or care?
Depending on the type of digital content the choice of management may vary. A person may want some of the digital assets to be archived or saved, or others deleted altogether. People who own bitcoin digital currency or intellectual property, including copyrighted materials, trademarks, or unique code, may be best served by transferring to family members, close friends, or business contacts.
People who have any sort of digital content of value should consider speaking with an estate planning attorney to identify the best methods to protect their digital estate.