Digital Assets and Estate Planning: What to Know About North Carolina Law

Our lives are becoming ever more intertwined with technology—and that has implications for your estate plan. You might be overlooking an important type of property — your digital assets. A digital asset is anything and everything that you own/control in an electronic format. Our Charlotte estate planning lawyers will provide an overview of digital assets and estate planning in North Carolina below.

Broadly defined, a digital asset is an electronic record or electronic data in which a person has a property or property interest. Digital assets come in a wide range of different forms—from your email account to the pictures on your hard drive. Generally speaking, digital assets fit into three categories:

1. Electronic Assets With Tangible Financial Value: Some digital assets have clear economic value. The most straightforward example is cryptocurrency, such as Bitcoin. It is a purely digital asset that can be sold to a third party market value. Another example is a highly-prized domain name or an income-producing website.
2. Access to Accounts: All of your internet accounts are, technically, digital assets. This includes everything from your social media accounts (Facebook, Twitter, Instagram, LinkedIn, etc) to your financial accounts.
3. Electronic Access With Sentimental Value: Some digital assets have significant sentimental value. As an example, you may have created a family photo album on your computer. Direct possession of that photo album is an asset.

The primary obstacle to a smooth transfer/transition of digital assets is knowledge and access. In many cases, family members are not even aware of all of the important accounts/digital assets that you have. Beyond that, a family member may not have the passwords that they need to get access to accounts. Financial institutions and other companies can be very difficult for family members and other trusted loved ones to work with without a proper estate plan in place.

In recent years, state law was changed to better facilitate the transfer and management of digital assets. In 2016, North Carolina Governor Roy Cooper signed the Revised Uniform Fiduciary Access to Digital Assets Act into law. Under the statute, you have the power to designate the persons (fiduciaries) who can assets to your digital assets upon death or incapacity. Though, the law applies only to personal accounts, not to employer-issued accounts. The reformed North Carolina law makes it easier to grant the Executor of your will and/or your Power of Attorney access to digital assets.

Understanding the importance of addressing digital assets in your estate plan, you may still have questions about how exactly to get started with the process. Here are four key considerations about digital assets and estate planning:

• Identification: As a starting point, it is useful to take a comprehensive inventory of your digital assets. Think about all of the electronic assets/accounts that are meaningful to you and your family. They should be addressed in your estate plan.
• Access: Access is crucial. If your loved ones cannot easily access your accounts, they are going to have a difficult time working through your digital assets after you pass away.
• Distribution: Digital assets are a form of property. You get to decide who gets what when putting together your estate plan. You may use a will or a trust to transfer digital assets.
• Instructions: It is a best practice to leave instructions for certain types of digital—especially social media accounts. What do you want to happen to your accounts if you pass away? Some people want them up, some people want them closed down. With a proper estate plan, you can ensure your wishes are respected.

You do not have to craft an estate plan on your own. An estate planning lawyer who is familiar with North Carolina’s digital asset laws can help you put a plan in place that best carries out your wishes and protects your loved ones.

At Arnold & Smith, PLLC, our North Carolina estate planning lawyers are committed to helping our clients find solutions. If you have any questions about digital assets and estate planning, we are more than happy to help you navigate the process. Contact our firm right away to set up your confidential initial appointment. With law office locations in Charlotte, Monroe, and Mooresville, we provide estate planning services throughout the entire region, including in Statesville, Pineville, Concord, and Indian Trail.