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Your Bank > Education and Advice > CNB University

Estate Planning for the 21st Century

Lynn Carleton
Lynn M. Carleton, CTFA, CSNP is Vice President - Trust Administration Officer and can be reached at LCarleton@CNBank.com or (585) 419-0670 x50683.

There’s a new wrinkle in estate planning these days: planning for the disposition of virtual (or digital) assets. Most people understand the importance of having a will stating who will inherit their physical assets when the time comes. Expanding your will to include who will receive access to your virtual assets is equally important.

ACCESS DENIED!

Consider this scenario: Amanda, a hypothetical small business owner, dies before addressing the disposition of her company’s digital assets (in a will or an advance directive). As a result, no one has the legal right — or the information necessary — to access the business’s website, online bank accounts, or business e-mail account (which includes the only contact information for several overseas customers). Access is also blocked to accounts Amanda established to make automatic electronic payments to several vendors (essentially virtual liabilities).

Her personal virtual assets are also in limbo, including several social media profiles, the balance in an online money transfer account, and all the information (photos, documents, medical and financial information, etc.) stored on her home computer, smart phone, and tablet, all of which are password protected.

ACCESS PERMITTED

The business in this hypothetical situation may survive the owner’s death, but not without some disruption while access to her online business accounts is sorted out. Amanda’s loved ones will also have some hoops to jump through since she didn’t plan ahead.

If your will hasn’t been updated for the digital age, here are the basics:

  • Identify each digital asset 
  • Specify who (a person or persons) will have access to the assets 
  • Provide all necessary access information (usernames, passwords, security answers, etc.)

You also might want to draft a “virtual asset instruction letter” giving your beneficiaries specific directions about what you want them to do with your various accounts (e.g., send a final e-mail to all your contacts and notify social network friends).

TAXES, TOO

In addition to sentimental value, virtual assets may have economic value and should be included in an estate plan for tax reasons.

Contact us with any questions at 585-419-0670.

This material is provided for general information purposes only and is not a recommendation or solicitation to buy or sell any particular security, product or service. Past performance is not indicative of future investment results. Any investment involves potential risk, including potential loss of capital. Before making any investment decision, please consult your legal, tax and financial advisors. Non-deposit investment products are not bank deposits and are not insured or guaranteed by Canandaigua National Bank & Trust, or any federal or state government or agency and are subject to investment risks, including possible loss of principal amount invested.

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