Social media influencer is a relatively new career. However, in recent years, it has exploded, along with bloggers, producing a new set of wealthy celebrities with their own estate planning issues to deal with. This was never more apparent than this past March when it was reported that influencer and model Jeff Thomas had passed away at the age of 35. Mr. Thomas left behind over 121,000 followers on Instagram, as well as his own art consulting agency called One Popsicle and a legacy as a top male model.
Influencers and bloggers have become lucrative career choices as a result of sponsorships and product placements. Controversial podcaster Joe Rogan is reported to have a net worth in excess of $215 million, primarily from payments connected to his podcast on Spotify, which is one of the most listened to ones in the world. As a result, people like Rogan need to engage in digital asset estate planning to address the unique aspects and requirements of these properties. In the following, we will discuss the key estate planning digital asset vehicles, how digital properties are transferred, and how to ensure that an individual influencer or blogger’s wishes are carried out when they pass away.
The Different Types of Estate Planning Vehicles
There are a number of different types of vehicles that estate planners use. The choice often depends upon the tax ramifications and how the individual would like to transfer his or her estates. The most common is a last will and testament. This will transfer your assets to whomever you designate upon your death. However, wills have to be submitted to the probate court, which can take time and cost your heirs money.
Other vehicles that might be better to consider are trusts. The revocable living trust is one where the individual continues to manage his or her financial affairs, with the designated trustee taking over upon death. The key benefit is that the assets will avoid probate, but the heirs may face tax consequences for their inheritance under this type of trust.
An irrevocable living trust is one where the individual places his or her assets into a trust that is managed by a third-party trustee. While this will avoid probate and have beneficial tax treatment, the individual will lose the right to control those assets while still alive.
How are digital assets transferred?
Digital assets are not tangible. In other words, they aren’t like real estate that is land or buildings, collectibles like antiques and musical instruments, or even cash and cash equivalents, like stocks and bonds. Instead, they are similar to intellectual property and contract rights. There may be a physical document confirming the existence of them, but they do not have an existence in and of themselves. Some digital assets include domain names, social media accounts, cryptocurrencies, NFTs (non-fungible tokens), and digital media content, such as videos, photographs, and music. For bloggers and influencers, some of their most valuable assets are old podcast episodes, TikTok clips that went viral, YouTube videos, and sometimes just their name or screen name.
Digital assets are transferred in a little more difficult way than tangible assets. In some cases, the heir may get the password and source code to websites and digital media. Others may be transferred by assigning contract rights, such as an assignment of the residuals from a digital platform for the podcast, blog, or episodes. As you can see, this will often involve working with a third party, so the stronger the digital estate planning is, the more efficient the transfer will be in the future.
How can I make sure my digital assets will be transferred according to my wishes?
Even though they are intangible, your digital assets are still property owned by your estate. Therefore, it is crucial that you work with an experienced estate attorney to help craft your plan. Whether you choose to use a will, revocable trust, or irrevocable trust, you will need to properly list all of your digital property in your estate plan. Furthermore, you should retain a copy of all ownership rights for websites, blogs, podcasts, videos, and clips, as well as a list of current passwords. You may consider entrusting this information to your estate attorney for safekeeping with release only upon your death.
The key to all of this is to have proper planning. The stronger your will or trust document, the more likely it will withstand any challenges from a potential heir who objects to your decisions. It will also assist your heirs in getting third parties to acknowledge their rights, whether with respect to the intellectual property contained in your digital persona, or the payment of contract rights.
Let Us Help You Protect Your Digital Assets
Whether you are an influencer, blogger, or podcaster, your digital assets are a large part of your net worth, which will make up your estate upon your passing. This is why you should work with one of our experienced estate planning attorneys at Shaw & Nelson. Book a call with us today, so we can begin helping you as soon as possible.