Digital assets, such as accounts on Internet websites, should be included when making estate plans, according to experts. Estate planning in New Jersey and elsewhere often includes information about bank accounts and life insurance policies, but many people forget to include digital assets that could benefit heirs or bring tax consequences to those who inherit.
For example, the decedent might have online accounts to which no one has access. Without logins or passwords, it is difficult for estate representatives to access important information. However, it is important that family members or executors have access to these online records in order to recover assets, pay bills and even access photos and other items of sentimental value to the family.
When making an estate plan, it is important to include information about Internet accounts. This information may be held securely by the attorney who formulates the estate plan if the testator is concerned about privacy issues. However, once the testator dies, it is important for someone to have access to digital accounts. Any password changes may also need to forwarded to the party responsible for the estate, or that person could be added to the account to enable instant access.
Estate planning can be complicated, and many individuals find that consulting an estate planning attorney may help them navigate the maze of regulations and tax consequences inherent in forming a good estate plan. With the help of an estate planning attorney, individuals may be able to avoid problems for heirs in the future and save money on taxes paid by family members or those who inherit.
Source: Word & Way, “Include digital assets in estate planning,” John Hardin, March 28, 2013