How Are Digital Assets Handled in Probate?

When a loved one passes away, their estate may include physical assets like their house, car, and sentimental items. However, in today’s modern world, many people leave behind digital assets that could be subject to probate court. This begs the question: How are digital assets handled in probate?

Radiant Probate & Estate Law, Inc. assists clients with estate planning and probate administration. Our legal team is here to explain what you need to know about managing digital assets after death and estate planning for digital property.

What Is the Role of a Probate Attorney in Santa Clara County?

Losing a loved one is never easy. It can become even more burdensome if you’re the designated executor or administrator of their estate. A complex legal process awaits.

When you go through the probate process as an executor, you’ll have to manage the decedent’s estate, pay debts to creditors, and wait for a probate judge to settle the estate before you distribute assets to beneficiaries. Hiring a probate attorney in Santa Clara County could make the process a little less daunting. Probate lawyers understand the state’s requirements and can help submit crucial documentation.

Legal professionals should be a trusted resource that you can turn to when you have any questions or concerns during probate.

Understanding Digital Assets

Before we answer the question, “How are digital assets handled in probate?” it’s important to define these parts of someone’s estate. Digital assets are owned electronic property, meaning you can only access them via the internet or a digital server. These assets may include:

• Online banking or investment accounts: Some people hold investment accounts that are exclusively managed online.
• Money transferring tools: Apps like PayPal or Venmo could hold funds that may need to be accounted for in someone’s estate.
• Social media accounts: No matter how active they were on these platforms, a decedent’s social media pages are considered digital assets.
• Email: Yahoo, Gmail, and other email platforms can be named digital assets in an estate.
• Cryptocurrencies: If someone owns Bitcoin or another cryptocurrency, it matters for probate.
• Intellectual property: Owned digital assets, like websites or domain names, fall under the umbrella of intellectual property.
• Stored media: Account for images, movies, eBooks, and other media stored within the cloud or on personal devices.

How Do Digital Assets Impact the Probate Process?

If you ask an attorney, “How are digital assets handled in probate?” they may tell you that these assets are subject to probate, though state and federal laws may impact the process. Until the court settles the estate, the appointed estate administrator or executor will manage all of the assets. However, they’ll likely need to show the proper documentation to access these accounts.

Say you’re the executor of a loved one’s will and learn that they had funds in an online banking app. If the account is not payable on death, the funds may need to go through probate before you’re able to distribute them. You should prepare to receive documents from the court that give you the legal authority to manage their assets.

Your next step will be to contact the company controlling the asset (an online bank, in this case). After you provide the necessary documentation, they may grant you access to your loved one’s account, which you can then include in their estate.

The process ends with digital asset distribution in probate. If the decedent had a will outlining their wishes, named beneficiaries should receive their assets. If they did not have a will, intestate laws typically determine who will receive a decedent’s estate.

Potential Challenges You May Face

The rise of digital assets can pose problems for executors and estate administrators. If someone held cryptocurrency, the fluctuating value of these assets could complicate estate inventory and valuation processes.

When it comes to handling digital assets in probate, privacy laws may create setbacks for executors. Companies like social media sites or email platforms are often unable to grant access to data without court authorization.

Consult a probate attorney for personalized guidance regarding privacy laws and how they impact digital assets within an estate. In some cases, disputes between beneficiaries may arise. Legal counsel can also advise executors in these situations.

What You Can Do To Protect Your Digital Assets

In today’s modern world, more and more people are wondering, “How are digital assets handled in probate, and what can I do to protect them?” Fully understanding probate court and how estates are managed is a solid start.

If you have not started estate planning, meet with a lawyer to discuss your goals. They could help you draft a will that outlines all of your final wishes, including who you’d like to manage your estate and the beneficiaries you want to receive both physical and digital assets. Provide detailed information regarding your digital assets, such as the accounts you hold and the passwords to access them.

It also helps to have your passwords stored in a secure place. Password management tools house the login credentials for all of your accounts in one place. A master password to the platform will give someone access to this vital information.

You might also consider keeping important information in a digital vault. People use these tools not only to store passwords and login credentials but also to store documents and instructions for handling their digital assets.

Consult a Probate Attorney About Your Options

At Radiant Probate & Estate Law, Inc., “How are digital assets handled in probate?” is just one of the many questions we hear from clients. If you’re not sure what happens to a loved one’s assets during probate or have questions about your role as an estate administrator, we may be able to help.

Our legal team has been serving the Bay Area for over 15 years and is committed to guiding clients through the complexities of estate planning and probate court. To learn more about our services or schedule a consultation, contact our Palo Alto-based firm at (650) 493-9200.