We’ve stressed frequently to maintain a list of your digital accounts and assets and keep this information secure with your other estate planning documents. We’ve also talked about considering your digital assets, such as photos, videos, social media accounts, etc., and what you would want to have happen with those items after your passing. But digital assets are more than your passwords and your social media accounts. If you’re an artist with digital assets or if you own digital currency, you have a lot more to think about when planning your estate. Let’s dive into this topic further.
Cryptocurrency is so new that most people haven’t considered investing in it yet. But for those who have, you likely haven’t thought about how to include digital currencies in your estate planning. Digital currency isn’t treated quite the same as stocks, and isn’t quite the same as monetary assets. There are additional considerations when folding these assets into your estate that must be handled before your passing in order to avoid confusion or conflict.
CNBC ran an article with great advice on what to do, and why it’s important that digital currency be documented in your estate. Owners of digital currency like BitCoin, Ethereum, and others need to document that they own it, where they bought it, and how an heir or representative can access it. Digital currency does share some similarities with stocks or online accounts in that you need to document account numbers and passwords and include those with your other financial assets. As CNBC points out, part of the appeal of cryptocurrency is its secrecy. However, that secrecy will disappear after your death. If the cryptocurrency accounts aren’t included in your estate, your heirs will inevitably receive a letter from the IRS notifying them of unreported income from the overlooked account. It’s better to include the information in your estate rather than leave it to your heirs to receive a confusing and stressful IRS letter.
The most common currency exchanges don’t require account holders to name beneficiaries, as other major financial accounts do. This means that if you don’t inform your heirs, don’t include the accounts in your estate, and don’t make plans to access the accounts now, that money is most likely lost. The exchanges won’t have anyone to notify or contact, and what complicates the matter further is that you can sign up for accounts without having to use your own personal information. If you neglect to make plans for your digital currency now, you place those funds at significant risk of being gone for good.
If you are an artist, writer, YouTuber, musician, or other creator of digital content, what happens to that content when you’ve passed on? If you hold copyrights or distribution rights to your work, you may need to specifically include those rights in your estate plans so that your estate can continue to produce or distribute your art after your death and legitimately hold the rights to do so. Copyright lasts for the life of the author plus 70 years after their death. The copyrighted work does not fall into the public domain immediately after the author’s death; it’s simply that the copyright holder changes. Also be aware that for any unpublished works, the same terms apply. The clock only begins, so to speak, once the work has been published.
So for an additional 70 years, your estate needs permission to reproduce and distribute your work. There are also the additional considerations of who you would wish to benefit from the sales income, how your work will be stored and archived, and what is considered part of your artist’s estate and what isn’t. Format Magazine interviewed a copyright expert on the topic and the article is enlightening. If you fall in this category, you may want to consult a copyright or estate planning attorney to find out more information.