With pandemic-related stay-at-home orders that began in 2020 and increasing numbers of people working and attending school from home on a full-time basis, it is not surprising that many people began looking for new homes. Arguably, most of us would opt for a tangible, physical property when deciding to move. The new owner of the “Mars House” paid more than $500,000 to purchase a digital NFT (non-fungible token) home.
If you are not familiar with what NFTs are, you are not alone. An NFT is an encrypted, unique digital token that verifies ownership of the item being sold. The digital artist’s signature is encrypted on the blockchain ledger. In the case of the Mars House, which was created by digital artist Krista Kim, the buyer paid the equivalent of $514,557.79 in cryptocurrency for 3D files of a digital property that the new owner can now upload to his or her “Metaverse.” The Metaverse has been described as a virtual extension of our world, where people purchase and trade plots of virtual land and build digital businesses and homes. People who purchase property and assets for their Metaverse apparently “live” in and interact with that world using digital avatars.
Kim believes NFT homes are signs of the future, with the launch of Apple’s augmented reality (AR) glasses and AR contact lenses allowing users to interface with digital assets. In the same week the Mars House was sold, other NFTs also exchanged hands and set records. Twitter CEO Jack Dorsey sold the first tweet ever published (dated March 21, 2006.) Beyond tweets and digital homes, digital assets can also include digital artwork and even fashion, such as digital-only footwear from Gucci.
From an estate planning standpoint, digital assets are another area to consider when creating and implementing Wills, Trusts, and other estate planning tools. It is important to make sure your documents address the management and disposition of any digital assets you own, as well as authorizing your named personal representative or trustee to handle those assets as part of your overall estate or trust.
To learn more, contact The Estate Planning & Legacy Law Center today!