Digital Assets: What are they and what should I do with them?

Estate plans are great tools for people to distribute their assets and property to beneficiaries and charities upon their death through tax efficient strategies. One of the biggest advantages of estate planning is the control of determining who will inherit certain assets, but what do you do when you have intangible assets? Digital assets have become more relevant today as people live online with smartphones and social media, but are often neglected when people think about estate planning and disposition of property and assets.

Digital assets are broadly defined as anything that is created and stored digitally, is identifiable and discoverable, and has or provides value (Fidelity & Investopedia). When defining digital assets, we should look at it like them in a Venn Diagram where some assets to fall in either one or both categories.

Traditional Digital Assets are the ones that most people neglect to plan while doing their estate planning. These assets are increasing as technology advances and people begin to live predominately in the digital world. Common traditional digital assets people own and are most likely stored on your phone, computer, or cloud storage/hard drive.

Newer technology digital assets like blockchain technology and cryptocurrency are the types of digital assets that younger generations are diving into with limited knowledge or understanding. These types of digital assets have been around for over 10 years but have become relevant today in the financial and technology realm due to increased technology and accessibility. 

It’s safe to say we all have some form of digital assets, but what should you do with your digital assets? Depending on the type of digital asset, there are multiple ways to plan for transition, but the common suggestion is to start with these steps:

1.                Take an inventory of assets.

2.                Keep credential records for your assets & storage.

3.                Backup assets to cloud/hard drive.

4.                Decide who you wish to receive the digital assets and transfer method.

5.                Choose & appoint a Digital Executor

6.                Make additions or updates to Estate Plans if needed.

More information on Crypto/ Blockchain & what to do with your digital assets on our website.