Like most people, you probably have a collection of your photos, videos, and music stashed somewhere safe in the virtual realm. But have you ever wondered what will become of these virtual items – digital assets – when you pass away or become incapacitated? Your digital assets are, in many cases, as important as all your other tangible assets. Therefore, don’t forget to include all of them during estate planning.
Not all virtual property has financial value, but the sentimental value of some, such as old family photos, is enough for them to be safeguarded and passed on to your beneficiaries. Also, you might have some ‘top-level secret’ assets that you might not want your kin to have access to. A digital asset trust will see that all your digital assets are handled appropriately according to your wishes in all these cases.
At McCollum Law, we have experienced and dedicated North Carolina estate planning attorneys ready to assist you in setting up a digital asset trust. We’ll see to it that your wishes are fulfilled to the tee. As you consider how to handle your digital assets, read on to better understand how a digital asset trust can fit into your estate plan.
What Is A Digital Asset Trust In North Carolina?
A digital asset trust is a trust that allows you – the creator of the trust – to place and protect all your digital properties. The trust gives your beneficiaries, trustee or custodian authorization to access, secure and utilize the available virtual assets.
Before digital assets trusts, estate planning attorneys in North Carolina included control of the virtual property in last wills and testaments. However, some digital rights aren’t covered by the law, hence the need for the fairly new digital asset type of trust.
Virtual Property Explained
According to North Carolina law, a digital asset is any record in electronic form in which an individual possesses rights and interests.
Thanks to the rapid advancement in technology, many peoples’ lives have moved to the digital world, creating lots of online material. For digital estate planning, virtual assets include any data and information produced by you existing in digital forms either stored online or on electronic storage accessories and any helpful information to access the said digital property.
Some of these digital assets include;
- Photos and videos
- Income-generating works
- Electronic communications such as email and social media accounts.
- Online content, including websites, blogs and online businesses.
- Cloud-based records and documents
- Online subscriptions
- Monies in online accounts such as PayPal
- Reward programs such as retailer or credit card loyalty programs
- Cryptocurrencies
- E-Commerce monies and merchandise.
Digital assets are rapidly evolving daily – what are regarded as digital assets today might change tomorrow.
Do I Completely Own My Digital Assets In North Carolina?
While you are the creator and owner of any online content and account, the electronic service providers still possess the licenses to use and access these accounts. If you have online content like a website or blog,, you own and control the content therein, but the domain service holder holds and grants the license to use and access the domain names.
When email and social media networks learn of a user’s demise, many times they will deactivate the accounts, even though some, such as Facebook, either allow a custodian to continue using the account to preserve the memories and sentimentality or place the account in memorial status.
Additionally, to avoid a buildup of charges or penalties, we recommend you direct all your online subscriptions such as Netflix to be discontinued.
The North Carolina Revised Uniform Fiduciary Access To Digital Assets Act (RUFADAA)
These are laws and statutes that govern and clearly outline processes and steps to be followed to access and disclose a user’s digital assets in case of death, incapacitation or loss of the ability to manage an account.
The act grants a custodian\trustee or fiduciary the rights to access your digital properties and carry out the creator’s wishes. Nevertheless, a fiduciary requires proper documentation such as a will or a power of attorney to access these digital assets legally.
What If I Don’t Want To Disclose All My Digital Assets?
You might have some digital assets you have categorized as ‘eyes only,’ and you’d prefer not to be seen or accessed by your beneficiaries. Including such information and designating the proper person to handle or dispose-off such assets is the wise path to take.
Additionally, under RUDAFAA, your custodian can;
- Either grant full or limited access to your digital assets
- Provide a copy of some or all of your digital assets
- Isn’t mandated to disclose any digital assets you have deleted
- Choose not to reveal any digital assets that might cause the custodian’s undue burden.
- Terminate your online accounts if the fiduciary requests for it.
Including those digital assets that you prefer not be accessed in a will or a letter isn’t a guarantee that they won’t be accessed. While digital estate planning, clearly designate who and how to handle these digital assets.
In summary, the acts protect you if you don’t want to fully disclose all your digital assets, of course, unless under special conditions such as court orders. In such cases, the act clearly outlines the documents required to disclose certain digital assets such as electronic communications.
Do My Beneficiaries Automatically Inherit My Digital Assets After My Demise?
Most electronic service providers such as domain registrars retain domain name licensing. Transferring online content to your beneficiaries should be strict as per the domain companies’ terms and conditions and within the law. On the other hand, some social media networks can either allow your beneficiaries or custodians to continue accessing your social media accounts or place them on memorial status to keep your memories alive.
How Do I Set Up A Digital Asset Trust?
Setting up a trust can be overwhelming; it’s still estate planning, and not many welcome the idea of planning for when they die. However, it’s an essential task if you want your digital assets to be taken care of when you are gone.
To set up the trust;
- List all your digital assets, including location and login credentials
- Decide and clearly outline the cause of action your custodian or trustee should take
- Name the trustee or custodian. They can be the same or different from your other assets’ trustee.
With this information, our estate planning team can ensure your wishes for your digital assets are honored within your larger estate plan.
Can I Update My Digital Asset Trust?
Digital asset trusts in North Carolina are revocable. You can update the trust while you’re still alive; login credentials, contact and business info or any other relevant info you wish to update. Be sure to include or notify your lawyer about any updates you perform.
You Need A Digital Asset Trust Attorney
Setting up a digital asset trust is vital in this fast-paced technological time. With people living and conducting business physically and virtually, there’s a need for digital assets to be protected, accessed and appropriately used after you die or become incapacitated. We can help – reach out to one of our experienced estate planning attorneys here at McCollum Law today.