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Don’t forget digital assets in New Jersey estate planning

On Behalf of | Jan 14, 2014 | Estate Planning |

It seems like residents of New Jersey and elsewhere are able to do more transactions online by the day. From downloading music and e-books to investing in digital currency, these things can add up to a substantial amount of assets over time. That is why it is important to include any digital property in the estate planning process, though the user agreements from some service providers may create a challenge.

It is often the case that users purchase the license for some services, such as e-books and music. This means that the user buys access to the digital files rather than purchasing the actual files. Many service providers state in their user agreement that these licenses are non-transferable; however, users can leave behind login information in their estate plan that will allow designated heirs to access the files. It may also be possible in some cases to save these files to a hard drive or a computer.

As Bitcoin becomes a more popular form a currency, more people may have a need to bequeath this asset. The easiest way to do this is to provide the information that allows heirs to log in to the digital wallet that stores the Bitcoin. However, keeping this process online leaves it vulnerable to hackers. A more difficult, but possibly safer method is to take them offline. Since Bitcoin is an encrypted currency, the codes can be listed and stored in a safe deposit box or a home safe.

Until very recently, digital estate planning has often been primarily concerned with leaving access to email and social media accounts as well as online photo albums. While these are still important, it is also critical for those who own other forms of digital assets to pass them to heirs or risk them disappearing forever. To avoid any confusion with this process, it might benefit any New Jersey resident to learn more about our estate planning laws.

Source: MarketWatch, How to give away your digital fortune, Andrea Coombes, Jan. 10, 2014