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Dealing with digital assets in an estate plan

On Behalf of | May 3, 2023 | Estate Planning |

One thing many people may not have considered when making an estate plan is the existence of digital assets. Because digital assets are so new and so unprecedented, awareness about them and laws to deal with them have lagged behind. Like many states, Washington has passed a bill addressing the issue of digital assets in an estate, but it is important to first understand what these assets are and why they are relevant.

What are digital assets?

Digital assets are any assets that do not have a material existence, only a digital one. They essentially come in three types. Some are traditional assets that have largely taken on a digital existence, such as bank accounts or brokerage accounts. From an estate planning standpoint, these are generally treated like their traditional counterparts. Then there are digital assets that may have no value or only sentimental value, such as social media accounts or photos. Finally, there are assets that have value, including cryptocurrency and NFTs. There are additional digital assets that have value in some cases, such as web domains.

Digital assets and estate planning

The main concern for an individual creating an estate plan and the executor who has been appointed is making sure that all the digital assets of value are included and that instructions are provided on how to access them. A list of accounts and passwords is critical for estate administration and probate. In particular, cryptocurrency and NFTs can be impossible to track down and access otherwise.

Accessing accounts

While most companies have individual policies about who can access a decedent’s account, Washington state law has a process in place for disclosure to a fiduciary when that information is necessary. People who are making an estate plan should consider both the monetary and sentimental value of various digital assets and include instructions for dealing with them.