WHAT ARE DIGITAL ASSETS?

WHAT ARE DIGITAL ASSETS?

For the purposes of future and asset planning, digital assets can include both hardware and software.
Any kind of electronic device that stores or can store data aka information can be a digital asset. This can include computers, smartphones, tablets, ebooks, external hard drives. These are “hardware” digital assets. Then there are intangible digital assets, such as your email accounts, social media accounts, your Paypal, Etsy, Youtube, iTunes, Spotify, and video game accounts. Now, there are online currencies, such as bitcoin that can be considered digital assets.
A hardware device of minimal monetary value might carry data that is invaluable, such as family photos, passwords, or other intellectual property.
In addition to personal digital assets, there can also be business digital assets that can be the foundation of a business. These digital assets include client contacts list, domain names, intellectual property.

WHAT IS THE RELATIONSHIP BETWEEN YOU AND YOUR DIGITAL ASSETS?
This, truly, is the crux of the matter when discussing estate planning in the context of digital assets.
The relationship between an individual and her digital assets is governed by a lot of external factors, including the terms and conditions agreed upon when the person first purchased or accessed that asset.
“Terms of Service” is the contract or document that lists the terms of use for each online account. Apple and Google’s Terms of Service are notorious in their length, along with other companies. Although very few people actually read them, the Terms of Service of each online account/company, such as Google, Microsoft, Apple etc. can vary widely and will dictate what can be done with each account. Similarly, whether or not any particular asset can be divided or given to someone will also depend on the Terms of Service as long as the Terms of Service comply with state law.
In late 2016, California legislature passed the Revised Uniform Fiduciary Access to Digital Assets Act. The Act allows a deceased person’s personal representative or trustee to access the digital assets of the deceased person, and some electronic communication. The Act is fairly new, but is effective in providing the framework for management of digital assets.
As mentioned above, each asset is unique and so is your relationship with each asset.

Stay tuned for more information on digital assets next week or contact us if you have specific questions.


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