Virtual Assets in Estate Planning
Estate planning typically involves implementing a strategy of how you will dispose of your physical assets upon your death. Physical assets can include a home, jewelry, furniture, and automobiles.
However, in today’s high-tech world, some of your assets probably cannot be physically accounted for. These assets can exist online, such as if you have an internet business, a blog that generates income from ads, frequent flyer miles, or a cloud depository for precious family photos. Such assets may continue to accrue untouched income for years or disappear altogether, simply because your heirs and beneficiaries don’t know they exist or don’t know where to access them.
An obvious solution is to disclose all usernames, passwords, web addresses, and email addresses to someone else. Inform the person who will serve as executor of your will or who will serve as Trustee of your trust of any online assets that he/she should know about. That person can then contact the website about obtaining those assets upon your death. However, keep in mind that some assets, such as frequent flyer miles, are not the property of the holder. Therefore, when the holder dies, the estate has no rights to them. Look at the asset’s Terms and Conditions to find out if that applies.
If you aren’t comfortable with disclosing that information with someone while you are living, another solution would be to explicitly contain that information in your estate plan. Keep a sheet of paper with your other estate planning documents describing each virtual asset, its web address, the username and password you use for it, and why it’s important. Your executor can then contact those websites when you pass away.
Providing this information is extremely important for sentimental assets. If your heirs and beneficiaries of your estate never claim or redeem these kind of assets, the asset’s service provider will rely on its Terms and Conditions to dispose of them. The Terms and Conditions could provide the elimination of the assets if the account is stagnant for a certain number of months or years. This could have a major impact on your family. For instance, if your family could not find what cloud depository you had been storing family photos, the elimination of those photos could be devastating to your loved ones.
Bill Hesch is a CPA, PFS (Personal Financial Specialist), and an attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning. He also practices elder law planning, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky. Contact Bill if you wish to review your assets and your estate plan. He can provide a specialized strategy for you to implement virtual assets to your estate plan in a way that you feel comfortable.