The needs of modern estate planning efforts have expanded beyond “traditional” physical assets and financial accounts to include a range of digital property and investments. As such, social media accounts, digital wallets, online businesses and virtual assets now all demand attention during the estate planning process.
However, partially due to the speed with which the estate planning landscape has changed over the past 20 years or so, many individuals still overlook these digital assets when planning their estates, which can lead to complex probate litigation concerns after they pass away.
What’s the big deal?
The primary risk of inadequate digital estate planning is that digital assets may not be properly accounted for in a person’s will or estate plan. This oversight can lead to uncertainty and disputes among heirs or beneficiaries about who has the right to access or control these digital assets. Unlike traditional assets, digital assets often require specific usernames, passwords and even encryption keys to access. Without clear directions and lawful access protocols, these assets can become effectively inaccessible, or worse, subject to unauthorized access and misuse.
Moreover, the laws governing digital assets are still evolving. Many jurisdictions lack clear legal frameworks addressing the inheritance of digital content, further complicating the administration of these assets during probate. This ambiguity can lead to significant legal challenges. For instance, if a deceased person owned an online business or held substantial digital currency, the absence of explicit instructions for these assets can trigger disputes among beneficiaries, potentially leading to costly and prolonged litigation.
Probate litigation concerning digital assets can be particularly contentious because of the high value and unique nature of these assets. For example, a dispute over the control of a popular social media profile or a profitable blog can raise complex issues about intellectual property rights and the commercial value of digital content. Additionally, if a decedent used online platforms for significant financial transactions or held investments in digital currencies, the stakes are even higher, and the probate process can become a battleground for those claiming a right to these digital fortunes.
To mitigate the risk of probate litigation, estate planning should include detailed instructions about each digital asset, designate digital executors and work to ensure that all legal guidelines are followed to grant those individuals proper access and control rights.
