Estate Planning and the Importance of Organizing Your Digital Assets
There was a time when you didn’t worry much about your email account, or the website you bought years ago, or your usernames and passwords for various financial and other accounts.
But now you do. Now you must make sure that your loved ones have access to your digital assets should you die.
"Digital assets are becoming more and more prominent parts of people's estates - they just can't be ignored anymore,” says Karen Van Voorhis, a certified financial planner with Daniel J. Galli & Associates.
So how do make sure your digital assets don’t die with you?
Here’s what experts say:
Put digital assets into your estate plan
Almost everyone neglects to consider this, no matter their age, says Kashif Ahmed, president of American Private Wealth.
“Make provisions in your will to authorize your designated executor to be able to retrieve your digital assets, and also to be able to shut down your digital accounts, especially social media such as Facebook.”
Ahmed has witnessed “horror stories” of social media accounts remaining active long after someone has died being taken over and "used" by someone else.
Barbara O'Neill, the CEO of Money Talk, recommends completing a digital assets inventory worksheet and sharing it with trusted individuals such as your spouse and the executor of your estate. An example can be found at https://njaes.rutgers.edu/money/pdfs/Digital-Assets-Worksheet.pdf.
A word of caution: Expect this task to take several hours to confirm usernames and passwords, says O’Neill.
And don’t overlook any account, says Van Voorhis.
“Accounts with an actual monetary value like PayPal or Venmo are actually includable in your estate, and someone needs to know how to access them if something happens to you,” she says.
And when it comes to language in your will, Judson Meinhart, a certified financial planner with Parsec Financial, says a “broad, catchall statement regarding the distribution of your digital assets – or the inclusion of them in your estate – is your best friend.”
Use a password management tool
Leveraging a service like LastPass, Dashlane, or Password Boss provides a convenient means for inventorying all your online accounts and can also help you create more secure passwords, says Meinhart.
Make sure too, says Thomas Murphy, a certified financial planner with Murphy & Sylvest that someone else – your designated executor or financial power of attorney, knows how to access those tools.
When available, Meinhart says the best option is to use service providers’ own account tools.
“These tools are unique to the individual service provider - Google, Facebook, PayPal, etc. – and provide the user with a variety of options, from naming a legacy contact who will be provided limited access to an account, to the outright deletion of your account and data if your account remains inactive for a certain period of time,” he says.
Create a digital vault
Dana Menard, the founder and CEO of Twin Cities Wealth Strategies, gives all his financial planning clients their own “digital vault” in which they can store all of their important documents like their estate planning documents, mortgage paperwork, copies of personal identification, credit cards, pictures and even family recipes.
“Everyone is living in a more digital world and when an older adult passes away it can be a lot easier for the next generation to access everything they need in a singular location without having to physically track everything down,’ says Menard. “It also gives us the ability to have those difficult discussions with our clients and their heirs.”
For her part, Van Voorhis recommends Everplans, a site meant to help people group all their important information in one place – including usernames and passwords. Users can assign a "deputy" who can also access all their information.
“It's great not only for digital assets but also for organizing medical, health, home, insurance, tax and other information,” she says.