What is a Digital Asset Protection Trust
A digital asset protection trust is a type of trust that allows the trust creator to protect their existing digital assets. Further, this type of trust also allows beneficiaries to access and utilize the assets within this trust. Estate planning attorneys only recently created digital asset trusts to protect digital assets that are not currently protected by law. Estate planning attorneys simply edited last wills and testaments. However, when this plan ran into problems, digital asset trusts became popular.
Digital Assets Defined
Technology is constantly evolving—and at a much faster pace than the law can keep up with. Thus, what constitutes a digital asset now may evolve into something completely different within five years. However, as of now, digital assets are simply assets that exist online and commonly include:
- Email accounts
- Personal photographs that are stored online
- Income-generating websites or blogs
- Virtual currencies
- Credit card rewards
- Information or documents stored in the cloud
- Social media accounts
- Digital copyrights or trademarks
- Online bank accounts or investment accounts
- Digital photos, videos, or written works that produce income
Digital assets do not have to have a tangible financial value which leaves many people asking why do you need to account for digital assets when planning your estate. The answer to this question is that creating a plan for digital accounts—whether or not they are financial in their nature—will make it easier for your loved ones to retrieve and secure these assets after you pass away. Estate planning for your digital assets eliminates the need for your loved ones to track down passwords and gives the beneficiaries of your estate the legal right to your passwords. Additionally, when dealing with online financial accounts, estate planning for digital assets protect income that your digital assets can generate such as royalty rights or revenues from an online business.
Why Not to Use a Will to Control Digital Assets
The largest issue with using a last will and testament to control your assets is that your beneficiaries will not have exclusive ownership over the digital assets. For example, a social media account is controlled by the creator but the social media site retains control of the profile. Issues arise as estate law prohibits people from gifting anything that they do not own. Most people think that to circumvent this law, people can simply share usernames and passwords. However, most social media companies prohibit account sharing and if you breach the terms of the agreement, your estate may experience legal problems.
How a Digital Asset Protection Trust Protects your Assets
Many technology companies simply license their property to users. In most cases, when the person with the license dies, the license expires. Digital asset protection trusts protect digital assets by allowing the person using the license to place this license in the trust. Further, trustees can manage this license on behalf of the beneficiaries for the benefit of the beneficiaries.
Can You Update a Digital Asset Protection Trust
As digital asset protection trusts are revocable, the creator of the trust can update this trust while they are still alive. Thus, the creator of the trust can change passwords, update addresses, or anything else the trust creator would like to do with the digital property. Another advantage of this trust is that the creator of the trust can modify the assets in the trust from their computer at home.
Trust and estate laws are complex. This is so no matter the type of trust you decide to establish. As such, it is extremely important to have legal representation that can help you correctly set up your trust. The Antonoplos & Associates trust and estate lawyers have 20 years of experience helping clients set up a variety of trusts. With this knowledge and experience, we can help with any legal issues that occur from setting up your trust.
Furthermore, Peter Antonoplos, founder and managing partner of Antonoplos & Associates has an LLM in Taxation from Georgetown University Law Center. With this knowledge, Peter can help you decide what is the best type of trust for you and your family. Additionally, he can maximize the cost savings you receive from setting up a trust in DC, Maryland, and Virginia.
Contact our DC Law Office for More Information
Finally, for more information regarding what is a digital asset protection trust, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding trust and estate law, check out our blog.