Law Office of Amy B. Van Fossen, P.A. - Elder Law

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Digital assets create special estate planning challenges

The emergence of the digitally connected world has resulted in many people having digital assets. Sometimes, digital assets hold significant value, like cryptocurrency or credit card reward points. Others might lack monetary value, like emails and photographs, but they could hold great sentimental value for people in Florida after the death of a loved one. Before the rise of digital assets, estate planning law accommodated the demands of transferring physical assets fairly well. However, the digital landscape presents special challenges for those want to make arrangements for the future.

When someone dies, especially when the death is sudden, surviving family members might not know where to find digital assets or that they even exist. In one case, a wife had no idea how to log into financial accounts to pay bills after her husband’s unexpected death. To prevent this scenario, an estate owner could prepare a directory of online accounts with passwords. However, this information should be kept outside of a will because a probate court will make that document public.

The terms of service that people must agree to before using most online accounts could also create roadblocks to transferring digital assets. Many of these agreements prohibit the transfer of an account even after the account holder’s death. A few online services allow for a beneficiary designation, and new laws are starting to provide tools for heirs who must access digital assets.

When digital assets come into play for an estate planner, legal advice could be vital. An attorney could evaluate terms of service agreements for online accounts and suggest strategies for transferring ownership. Additionally, legal counsel could provide insights regarding methods to limit taxes on heirs or protect privacy when transferring wealth.