Cryptocurrency & Digital Inheritance - What You Need to Know

It only makes sense that as our lives become increasingly digital, so do many of our assets. Digital assets include anything from bitcoin investments to domain names that host personal blogs. Despite how common these assets are, they are rarely considered in people’s long-term financial planning. That’s why the idea of a digital inheritance is emerging as a highly important area in Estate & Cryptocurrency Planning.

People need to consider how their email accounts, online investments, social media handles, and more will be handled in the future. If not, these assets, and any funds or memories that they contain, could potentially be lost online -- along with the chance to pass them down to family members and friends. Keep reading to learn how to set up an inheritance that takes all of your online assets into account: 

• Can you inherit digital and cryptocurrency assets? 

• What are Digital & Cryptocurrency Assets in Estate & Cryptocurrency Planning

• Update Your Estate & Crypto Plan to Include Digital & Cryptocurrency Assets Today

Can You Inherit Digital & Cryptocurrency Assets?

You can inherit any digital and cryptocurrency assets that are fully owned and transferable, so long as they are designated in an official Estate & Crypto Plan. If there is not a specific beneficiary named for digital and cryptocurrency assets, control may pass to the Executor of the Estate and ultimately the next-of kin. In some cases, digital and cryptocurrency assets may be overlooked entirely, especially if the family is not aware they exist. 

Note that because the digital space involves so many private companies, the rules surrounding if and how they can transfer vary slightly. It is important to be aware of data privacy laws and criminal regulations surrounding access to another individual's personal digital and cryptocurrency assets. For this reason, it is crucial to include digital and cryptocurrency assets (and how to access them) in an Estate & Crypto Plan. 

What Are Examples of Digital & Cryptocurrency Assets That Can Be Inherited?

As a general rule, digital and cryptocurrency assets that are owned outright can be passed down through a Will. The key is to confirm that the asset in question is transferable -- as some digital and cryptocurrency assets may specify against it. Here are some examples of digital and cryptocurrency assets that can be inherited: 

• Bitcoin and other forms of cryptocurrency

• Non-fungible tokens (called NFTs) 

• Domain names

• Funds kept in online accounts, such as PayPal

• Money inside an online store, if you have an Etsy or Amazon shop

• Digital music files or pictures

• Frequent flyer miles, depending on the airline

• Blog content or other online published works

• Monetized video channels actively earning advertising revenue

• Online investment portfolios and wallets 

Are There Digital & Cryptocurrency Assets That Cannot be Inherited?

When talking about the ownership of digital and cryptocurrency assets, an important distinction emerges between transferable and non transferable assets. Typically the non transferable category includes digital and cryptocurrency assets that are licensed for personal use, but are not actually owned by individuals. These assets therefore cannot be inherited; though you can specify how to access them in an Estate & Crypto Plan. Here are a few examples: 

• Email accounts

• Social media handles and accounts

• App accounts and the information contained in them

• Subscription services, such as Apple TV or Spotify 

• Any assets deemed non transferable in the terms, this is most common with domain names

What Are Digital & Cryptocurrency Assets in Estate & Cryptocurrency Planning?

Digital assets can be treated like any other personal property in Estate & Cryptocurrency Planning, as long as you take steps to include them in your Will. Unfortunately, it is all too common for individuals to fail to disclose information that could provide loved ones access to certain digital and cryptocurrency assets. This can lead to the loss of personal information or pictures, and in some cases additional funds that could have been passed down. 

As digital and cryptocurrency assets become more common, it is increasingly important to specify how they will be handled within your Estate & Crypto Plan. This means including a list of digital and cryptocurrency assets, how they should be transferred, and instructions for beneficiaries to gain access. During the Estate & Cryptocurrency Planning process, it is often recommended to write down important account information and passwords for loved ones to help ease this process in the future (especially the access keys to any cryptocurrency). 

The transfer of digital and cryptocurrency assets does bring up privacy concerns. After all, you may not want family members to necessarily have access to your email or social media accounts. In these cases, it is especially important to determine who to provide account information to. You can even disclose in your Estate & Crypto Plan assets that you do not want to become accessible after your death. 

When it comes to cryptocurrency or bitcoin inheritance planning, proper documentation is essential. Just like with tangible assets, you want to make sure that ownership can smoothly transfer to your beneficiary. Because these investments are gaining popularity so rapidly, the regulations are changing as well. Read our guide on how to leave cryptocurrency in your Will for a more specific overview.

Update Your Estate & Crypto Plan to Include Digital & Cryptocurrency Assets Today

The simplest way to ensure your digital and cryptocurrency assets are taken care of in the future is to include them in your Will. Not only will this information point your loved ones in the right direction, but it can also save them time in managing and closing your Estate. Whether your digital and cryptocurrency assets include cryptocurrency or funds from an online store, it is crucial to designate how these funds should be managed. 

Estate & Cryptocurrency Planning with digital and cryptocurrency assets can be somewhat difficult to navigate alone, particularly as regulations on the transfer of online assets consistently update. By working with an Estate & Cryptocurrency Planning lawyer, you can receive personalized guidance on organizing the future of your digital and cryptocurrency assets. This can help you set aside valuable funds for loved ones, protect your personal privacy, and decide how your online presence is managed. Learn more about our services to get started today. 

Everything from work meetings to birthday parties have moved online in the past year. Despite a return to “normal” life, it seems the digital wave is not slowing down anytime soon. Consider how many digital and cryptocurrency assets you currently have and how you want them managed in the future. It may be time to establish a digital inheritance for your family and loved ones. 

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