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Michael Lonich

Digital Inheritance: Safeguarding Your Virtual Assets in Estate Planning

February 1, 2024/in Estate Planning /by Michael Lonich

Creating an estate plan is vital to providing financial security to your loved ones, establishing generational wealth, and ensuring your final wishes are carried out. When we consider our estate plan, we tend to think in terms of physical assets, such as real estate and personal property. 

However, as technology evolves, many of our assets only exist in a virtual world. Therefore, it only makes sense to establish an estate plan that covers our digital assets in addition to our physical ones.

What Are Virtual Assets?

Virtual assets are non-physical assets that can be traded or transferred digitally. They can be used for payment or investments. Examples of virtual assets include cryptocurrencies, such as Bitcoin or Ethereum, virtual goods in online games, digital arts, and other forms of digital property that are representations of real-world assets.

The value of virtual assets can fluctuate significantly and is often determined by factors such as demand, scarcity, and utility within their respective digital ecosystems.

Why Should You Include Virtual Assets in Your Estate Plan?

Virtual assets can hold both sentimental and monetary value. Including them in your estate plan ensures a comprehensive valuation of your wealth after you pass away. If they have significant value, such as cryptocurrency or frequent flyer miles (depending on the airline’s policy), they can help ensure your beneficiaries benefit from them.

You can also help preserve your legacy by having a plan to distribute NFTs, digital art, and other online content.

Some digital assets, such as social media, email, and online banking or payment accounts, are often tied to personal information and can hold financial benefits. If they are not included in your estate plan, there is the risk that they will be inaccessible after your death and lose any value.

Last, unmanaged digital assets can increase the risk of identity theft and fraud. Cybercriminals can exploit inactive user accounts, leading to potential financial and reputational damage.

Creating a Digital Estate Plan

Here are some steps you can take to ensure your digital assets are properly included in your estate plan:

  1. Make a comprehensive list of all your digital assets. This includes online financial accounts, email accounts, social media profiles, digital collections (music, e-books, photographs), blogs, and cryptocurrencies.
  2. For each digital asset, list the necessary access information. This might include usernames, passwords, security questions, and other required details for login.
  3. Specify what you want done with each virtual asset. Do you want them transferred to another person, closed, or maintained? Would you like your digital collections downloaded and given to a specific person?
  4. Your virtual assets will likely change and grow over time. Regularly review your inventory and update your estate plan to ensure nothing is left out.

Creating a digital estate plan to safeguard your virtual assets can be challenging. California’s Revised Uniform Fiduciary Access to Digital Assets (RUFADAA) allows for the management and disposition of your virtual estate. However, the laws are complex, so it’s best to discuss your estate plan with one of our attorneys at Lonich Patton Ehrlich Policastri. We have the expertise you need to create an estate plan that covers your physical and virtual assets. 

Contact us for a free consultation by calling (408) 553-0801. We will work with you to create a complete estate plan that ensures the fulfillment of your wishes.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

Michael Lonich

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Specializing in Divorce and Estate Planning, I am San Jose Attorney, Michael E. Lonich; and I have been battling for client’s rights for nearly 40 years. When focusing on divorce, child custody, and related matters, I know all too well the emotional and financial toll divorce has on clients. Integrity, common sense, and a passion for what I do which guarantee the best possible results for my clients. Resolution of family law issues requires an attorney able to navigate the myriad legal and emotional issues presented in cases. Financial issues, child custody, domestic violence, valuation of property, analysis of RSUs, hidden assets, spousal and child support, all may require trial, mediation, or a collaborative effort with the parties. Regardless, each client gets the individualized attention they require. Every family law case is unique, we partner with you to develop a comprehensive approach to get the best results.

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LONICH PATTON EHRLICH POLICASTRI

Phone: (408) 553-0801
Fax: (408) 553-0807
Email: contact@lpeplaw.com

1871 The Alameda, Suite 400
San Jose, CA 95126

Located in San Jose, Lonich Patton Ehrlich Policastri handles matters for clients in northern California, specifically San Jose and Silicon Valley. Our services are available to anyone within the following counties: Santa Clara, San Mateo, Contra Costa, Santa Cruz, Monterey, San Benito, and San Francisco. For a full listing of areas where we practice, please click here.

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