• By: Ranvir Sandhu, Esq.
Estate planning for digital assets in California with business tools and financial symbols

In this article, you can discover…

  • What digital assets are, and how to pass them on to beneficiaries
  • Whether a power of attorney can manage digital assets for you
  • How to protect your digital intellectual property

What Are Digital Assets? Are They Recognized In California?

Digital assets include things like cryptocurrency, NFTs (Non-Fungible Tokens) (which may be stored in separate wallets or devices with encryption that makes third-party access challenging), digital media, Software and Code, Domain Names and Intellectual Property. In California, digital assets are recognized as part of estate planning, and our documents include provisions to address them. If you’re concerned about your digital assets and ensuring they are properly managed, you should reference specific details about them in your trust documents to ensure clarity and protection.

Which Digital Assets Can Legally Be Included In My Estate Plan?

All digital assets can be included in your estate plan. Typically, these refer to cryptocurrencies like Bitcoin, various tokens like BONK or WIF, or NFTs. Most people discussing digital assets are referring to these sorts of assets exchanged on platforms like Kraken or Coinbase. Including these assets in your estate plan ensures they are properly managed and accessible to your designated beneficiaries.

Can A Digital Executor Be Appointed In California?

You can appoint a trustee or another third party to manage specific types of digital assets. Your trust can be customized to include guidelines on how these assets should be handled, ensuring they are managed according to your wishes.

Can A Power Of Attorney Manage My Digital Assets If I’m Incapacitated?

A general durable power of attorney (POA) can be tailored to include the management of digital assets, but only if explicitly stated in the document. A POA typically activates when you’re deemed incapacitated (but it can also activate on set events and/or for a duration of time and/or particular purpose). Digital assets, such as online accounts, social media profiles, or cryptocurrency holdings, require specific authorization to ensure your agent can access and manage them legally. Without this, service providers will likely restrict access due to privacy laws.

It’s advisable to clearly define incapacity in your POA, requiring certification by two or more physicians to activate the document. Additionally, working with an estate planning attorney ensures your POA is robust, covering both traditional and digital assets. By doing so, you ensure that your agent has the authority to manage your affairs effectively, even in unexpected circumstances.

How Can Business Owners Protect Digital Intellectual Property?

If you’re a business owner, you can protect your digital intellectual property by implementing several key strategies. First, proper intellectual property agreements, such as non-disclosure agreements and intellectual property assignment agreements, must be established to clarify ownership rights and usage. These agreements help safeguard proprietary information from misuse by employees, contractors, or third parties.

Next, ensure your business operates under a formal entity, such as a corporation or LLC, to separate personal and business assets. This structure provides liability protection and legal clarity. Additionally, digital IP and corporate assets should be referenced in your estate plan, ideally as part of a trust, ensuring seamless management and succession planning.

Lastly, thorough documentation must be maintained to identify the business’s intellectual property as part of its assets. This strengthens legal claims to ownership and simplifies enforcement in case of disputes or unauthorized use.

What Challenges Might I Face When Accounting For Digital Assets In My Estate Planning?

Many clients have a straightforward approach when it comes to including digital assets in their estate planning. Most simply inform us about their digital assets, such as online accounts or cryptocurrencies, and we include them as part of their trust. We incorporate specific language into the trust documents to ensure their digital assets are fully protected and legally accounted for.

Still Have Questions? Ready To Get Started?

For more information on Planning For Digital Assets In California Estate Plans, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (510) 916-2100 today.

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