What Are Virtual Assets?

Andrew P. Grau | November 2011

Virtual assets are electronic data stored on a computer or the internet. These assets include emails, digital photos, electronic bank statements, domain names, and online accounts. There is emotional, and sometimes financial, value in virtual assets. Online accounts are used to communicate, pay bills, access financial assets and conduct business. Often, when the account holder passes away, nobody has access to passwords, or worse, nobody knows the account exists. As a result, online accounts and other virtual assets are left untouched. The rise of the internet has led to the proliferation of virtual assets. As the baby boomer generation ages, internet use among the elderly will skyrocket. A recent study showed that 29% of people over the age of 71 use the internet, compared to 80% of those in the baby boom generation. In the near future, decedents estates will encounter virtual asset issues with much more frequency. For example, consider a decedent with substantial assets and a strong tendency to manage those assets in a way that leaves little or no paper trail. Suppose the decedent managed the financial assets online, received paperless account statements by email, and maintained information about those assets only on a computer or network. It will be difficult just to discover that those financial assets exist. This could lead to the estate failing to identify and collect substantial assets, a major detriment to the decedents beneficiaries. According to the Wall Street Journal, there is currently $32.9 billion worth of unclaimed assets held in the state treasuries across the U.S. As ownership of virtual assets continues to expand, and people conduct more of their financial business online, this amount of unclaimed property may rise substantially. The law relating to virtual assets has been slow to develop. Unless and until a legislative solution is provided, careful planning that addresses virtual assets is important for anyone with a significant internet presence. A statement of virtual asset authority within a Will can specifically grant the executor access to virtual assets. A virtual asset instruction letter can serve as a road map that lists all online accounts and other virtual assets, including passwords, and gives instructions on what to do with those assets. Since it contains private password and account information, the letter should be kept in a secure location, such as a safe deposit box or home fire-proof safe, which can be accessed only by a legal representative. To discuss ways to address virtual assets in your estate plan, or for help administering an estate struggling with virtual asset issues, please contact one of the attorneys in our Estates & Trusts Department.