We live in an increasingly digital world. Ten years ago, few Americans knew much about cryptocurrencies and virtual wallets. Today, thousands of people have made fortunes off their digital assets. However, even Bitcoin millionaires often make the mistake of leaving their legacies unprotected. While the law is still adapting to the age of the internet, recent legislation makes it easier than ever to protect your virtual estate, no matter its size or worth.
Taking Stock of Your Digital Estate
You do not need to be a cryptocurrency investor to have a digital estate. If you use social media—whether it is Instagram, Facebook, or Snapchat—you already have virtual assets.
In fact, any content that is stored in your phone, on your laptop, or in a cloud server could be considered a digital asset.
Your digital estate could include:
- Online bank accounts
- Social media accounts
- Personal blog or digital journal
- Email account
- Photographs and video stored in a cloud server or digital drive
- YouTube channel
- E-commerce profile
- Cryptocurrency wallet
Even if your digital estate does not have a monetary value, you might still want your family members to take control of your virtual assets once you pass away. By assuming control of your accounts, they could moderate automated content, create a memorial post, or inherit your investments.
Digital Estate Planning Demands Modern Solutions
Louisiana law is always changing. However, legislators and policymakers are still trying to understand how digital assets can fit into traditional estate plans. This disconnect—between decades-old guidance and the realities of the present day—can present unexpected challenges for anyone trying to secure their estate.
Many social media platforms, for instance, have terms and conditions that prohibit them from handing over a user’s account details—even if the user has passed away, and their relative is trying to access an asset they are supposed to inherit. In this way, modern estate plans need to account for modern challenges.
The Different Approaches to Digital Estate Planning
Some states, like California, have already introduced and enacted digital estate laws.
While Louisiana is still developing more legislation, residents of the Bayou State still have options. The two most fundamental approaches to digital estate planning are:
- The Inventory Model. Someone who holds limited digital assets—such as a handful of social media accounts or a single, low-value cryptocurrency wallet—could simply “inventory” their estate by listing their assets such as account usernames, passwords, and document instructions. This inventory could be included as an addendum to a will and be entrusted to a special digital estate executor. However, digital inventories are not ideal for everyone, especially people who spend a lot of time with technology and may not have the time, resources, or energy to document all of their holdings.
- The Trust Model. Some digital assets such as cryptocurrency can be transferred into the control of a trust. A revocable living trust, for instance, allows an individual founder—or trustor—to transfer digital, physical, and financial assets into the trust. While the trustor is still alive, they can exercise limited control over their assets and set conditions for how these assets should be distributed when the trustor dies. A trust model for digital estates should be considered by anyone who values their online profile, owns significant assets, or is a beneficiary to revenue-generating content.
Both the Inventory Model and Trust Model have distinct advantages and disadvantages. Many Louisianans with complex digital estates may need professional assistance in creating a succession plan that accounts for the intricacies of virtual property—from protecting the keys to a cryptocurrency wallet to understanding how platform terms of service could affect transfers of ownership.
Contact Us Today
Estate plans are supposed to be comprehensive. If you are trying to create an estate plan from scratch or have not yet accounted for digital assets in your existing will or trust, you—and your loved ones—could reap significant financial rewards by taking your first steps to protect your digital estate.
However, the complexity of Louisiana’s existing laws can make digital estate planning difficult. To ensure your legacy remains safe, consult an attorney who has the experience you need to keep both your physical and digital assets safe. Send us a message online to schedule your consultation today.