Matthew Mellon gambled back $1b lost fortune: Now he’s dead and the money’s vanished
22 Apr, 2018 10:55am
’According to Forbes magazine, Mellon was worth an estimated $1 billion ($1.38b) because of an extraordinary gamble in Ripple cryptocurrency –money similar to Bitcoin which exists only in the digital world. He turned an initial $2 million investment into an online fortune.
He "cashed out" $350 million of his investment on January 3 – just six days before the value of Ripple plunged by 80 per cent. The market has since rallied, meaning his remaining investment is currently worth about a quarter of a billion dollars – and rising. But a disturbing question remains about where the money is.’
*check the link below for full story
The above is an example on poor digital assets planning where his family members are not able to find the passwords to access his cryptocurrency investment that worth billion.
What are Digital Assets??
Digital assets may include all files and information stored over the Internet such as emails, photos, social media accounts, domain names, cryptocurrencies such as bitcoin, virtual game currency and e-wallet etc. Some digital assets may have economic value while some may have only sentimental value but it is still important to leave instructions in the Will to the appointed Digital Facilitator to manage the digital assets.
What are the problems with Digital Assets??
One of the common problems with digital assets planning is that family members has no knowledge on the existence of the digital assets. When no one knows that the client owned digital assets then mostly likely the assets will not be recoverable. Another problem with digital assets planning is the family member needed passwords or codes to access the digital assets. However, your clients may not want to put the passwords directly into the Will to preserve confidentiality.
How to will away the Digital Assets:
Despite the uncertainty to the planning of digital assets, below are some steps that you can advise your client to preserve their digital legacy.
- List down all the digital assets in the Will or inside Digital Asset Memorandum.
- Appoint a proper Digital Facilitator who is internet and computer savvy to handle the digital assets.
- Provide instructions & passwords to the Digital Facilitator.
- Update the lists and make backup whenever possible.
Conclusion
Although the concept of digital assets may be new, it is still important that you as Rockwills Estate Planner should advise your client to write a Will and leave instructions to their loved ones on what to do with their digital assets upon death.
Sources:
- https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12037373
- https://www.forbes.com/sites/nathanvardi/2018/04/19/the-last-days-of-banking-heir-matthew-mellon/#4b603c9c5d52
- https://www.personalcapital.com/blog/legacy-estate-planning/have-you-included-digital-assets-in-estate-plan/
- http://www.theedgemarkets.com/article/estate-planning-bequeathing-your-digital-assets
Disclaimer: This article is given purely for information drawn from other sources and Rockwills makes no representations, express or implied, thereon and shall not be responsible for the accuracy of such information.