Berman & Asbel, LLP

Digital assets require valuation for estate purposes

Increasing numbers of Pennsylvania residents possess digital assets. Some of them, such as digital photographs on a smartphone, might only have sentimental value, but other forms of digital assets could be worth quite a bit of money. An estate plan should include information about how to access a digital portfolio and assign a value to the assets.

Bitcoins, internet domain names, logos and digital music libraries present examples of potentially valuable digital assets. An online business without a physical location could be another form of digital asset. After a person dies, digital wealth needs to be included in the inventory provided to a probate court. These types of assets will also have to be listed on Form 706, the federal estate tax return form.

Appropriate methods for valuing these assets will vary. A business appraiser could analyze an online business and calculate its value. Other parts of a decedent's digital legacy could be easy to value. These assets include PayPal balances, cash-back rewards on a credit card or account credits at online retailers.

In some cases, these types of assets, along with other more tangible ones, will have previously been transferred into a trust. This could have been done by the owner for a variety of reasons, one of which is to avoid the often lengthy, expensive and public probate process. An attorney can check the language of the trust document to see how these assets are to be handled by the trustee and how they will end up being distributed to the named beneficiaries.

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