By Valerie Hedley
Name an executor, check. Retitle bank accounts into the name of your revocable trust, check. Designate beneficiaries for your retirement accounts, check. Now you’re either frantically wondering whether you have crossed these action items off of your estate planning to do list or patting yourself on the back for a job well done. But not so fast … have you addressed digital assets in your estate plan?
Yes, You Have Digital Assets
If an advisor asked you whether you have digital assets, your likely response would be a confident, resounding no. This may have been the correct answer 20 years ago, but the paradigm has shifted – and quickly. While clients tend to hear “digital assets” and think of cryptocurrency such as bitcoin and an array of other obscure decentralized exchanges running on blockchain algorithms, digital assets are as frequently possessed as pennies in your car’s console. Put simply, a digital asset is any electronic record in which an individual has a right or interest. This type of property includes everything from computer files, web domains, virtual currency, social media accounts, to email and even text messages.
Planning for Digital Assets in Your Estate
We have established that you do indeed have digital assets. Now what? The first step is a review of your estate planning documents. Under the Uniform Fiduciary Access to Digital Assets Act (the Act), which has been adopted by most states, the person creating the estate plan (known as the principal) appoints one or more fiduciaries (i.e., executors, trustees, guardians or agents) who are permitted to manage the principal’s computer files, web domains and virtual currency such as bank accounts. However, the fiduciary will not have access to electronic communications such as email, text messages and social media accounts, unless the principal explicitly grants such access in the legal document creating the agency relationship.
Imagine you have now updated your estate planning documents to adopt the Act and incorporate the provisions granting your fiduciary access to electronic communications. But you’re not finished yet! Creating a digital asset inventory is the next step … how else will your fiduciary know what needs to be addressed? The inventory should include the names of each account and include the assets or logins for each account along with the corresponding passwords. Many people use a “digital vault” with a master password that can be accessed by an executor at the principals’ death. BB&T is able to hold these master passwords securely in our will vault or in a branch safety deposit box. Of course, the digital vault will only be helpful to the fiduciary to the extent the principal keeps the passwords in the vault updated!
From the estate that lost millions because no one knew the bitcoin wallet password needed to sell the decedent’s cryptocurrency to a family painfully reminded of their loved one’s untimely death because the executor was not given authority to shut down her Facebook account, the financial and emotional problems that can be addressed by proper digital asset planning are endless. Failing to do so in this day and age is not an option. Please contact your BB&T Wealth team to begin the process. We are here to help!
About the Author
Valerie D. Hedley, JD, CTFA
Valerie is a Personal Trust Specialist within BB&T Wealth based in Richmond, Virginia. She holds an undergraduate degree from Washington & Lee University and a JD from the University of Richmond’s TC Williams School of Law.