As almost everything we do seems to go digital, the conundrum of how to plan to pass on our digital lives has become more and more complex with every new app, online service and social media profile. An article from Seeking Alpha, “Estate Planning: Don’t Forget Your Digital Assets!”, seeks to highlight just how big an issue this has become for most families.
According to the article, only about 45% of Americans have an estate plan, and of that estimated 45%, few have a truly comprehensive plan. Many may have a simple will, medical documents and possibly even life insurance, but few have a plan they know will make things simple for their families. Dealing with digital assets can be a huge headache for heirs, but a little planning and coordination with your estate planning attorney and the custodians of your online accounts can go a long way toward minimizing the stress your heirs will deal with after your death.
Step 1: Create an asset inventory. Creating an organized list of your assets can be a great help to your heirs as they try to decipher your assets after your death. And it’s not only bank and retirement accounts, life insurance policies and home ownership; you need to have a record of your digital assets, too. Think about it this way: if you have a username and password, add it to the list of assets. PayPal accounts, YouTube, Netflix, iCloud or Google Drive accounts, websites you own and even blogs you write or maintain are all part of your digital assets you will be leaving behind. A little planning now means you can account for all your assets.
Step 2: Enable access. Many online account services such as Facebook, Twitter, LinkedIn and Gmail have deceased-user policies as a way to grant heirs access to your accounts once you’re gone. Each company’s policies are different, but it’s better to contact them now and direct how these assets will pass than to leave behind a headache for your heirs. Add notes to your inventory list so heirs know what companies you’ve spoken with and the process for granting them access to your digital accounts.
Step 3: Track assets regularly. Estate planning is not a one-time transaction, but an ongoing relationship. Most people’s assets change over time, whether that be when they sell a home, move to a new job and start a new 401(k), or open up a new online account. Most of us change passwords from time to time (and should do so even more regularly). It’s important to maintain your inventory of assets and keep it up to date, whether the assets be financial or digital.
At Family Estate Planning Law Group, this is a foundational aspect of our estate planning process. We don’t just work with our clients to create a plan; we work with clients to align assets with the plan, work with companies and financial institutions to verify assets are correctly aligned, and regularly review an asset inventory with clients to ensure all assets are accounted for, aligned and verified.
For more about our unique process, explore our website and contact us to schedule your consultation today!
Reference: Seeking Alpha (April 10, 2016) “Estate Planning: Don’t Forget Your Digital Assets!”