Everything you need to know about digital estate planning
When planning for asset management after passing away, people generally make sufficient arrangements in their will for their finances and physical property.
However, in a world where more and more of our personal information is stored online, it's also imperative to make a digital estate plan so your loved ones can access your digital property.
These assets usually include social media and email accounts, subscription services, personal images or videos stored through online platforms, blogs and domains and online currency. When signing up for these accounts and services, the lengthy terms of service and user agreements that we all scroll mindlessly through usually contain a clause that states that after a person passes, the company will terminate their account -- without awaiting next-of-kin requests for content.
Most states have adopted some sort of legislation around how to handle a person's digital assets, typically granting traditional executors or will representatives access to some digital information. However, these laws often contain many barriers preventing complete access, limiting the executor to only access information related to files needed to manage the physical estate.
To avoid having your online data deleted, here are some steps you can take to plan for the efficient transfer of your digital assets:
• Appoint a digital executor: In many states your will executor may not automatically gain access to your online information. Therefore, it is vital that you specifically assign someone to handle your digital assets and provide them with the necessary materials to do so. Usually, people will use the same executor as their will to manage their digital estate, but you can also appoint a different person if you would like.
• Create a digital assets inventory: So your executor can access all your logins and passwords in one place, you need to take an inventory of all the accounts that store your digital information. Many programs, such as LastPass, 1Password or Bitwarden can securely store all your login information in one place, locked in a secure virtual vault. You can always opt for a more straightforward option like creating a spreadsheet, but this may be more time-consuming and less secure. After deciding which accounts are essential to include in your digital estate plan, it is necessary to keep this inventory up to date by adding new or removing unused assets and updating passwords as needed.
• Make a plan of action: Once you have accumulated all your assets, create a plan of action -- decide what you want your executor to do with this digital data. This plan should specifically outline what accounts you may want to be deleted, archived or transferred to your heirs and what digital property requires other courses of action.
• Secure your data: Since your digital estate plan contains information on accessing your data, you need to store it in a secure location. Do not include the plan in your will. Because a will is a public document that anyone can gain access to after you pass, you should store information surrounding how to manage your digital assets in a separate location -- either by giving it to your attorney, using a secure digital storage service that your executor has access to or locking it in a safe.
No matter the situation, when planning your will, it is also essential to create a digital estate plan, to save your loved ones unnecessary stress and extra heartache.
• Craig Bolanos is CEO and founding partner of Wealth Management Group in Inverness and Downers Grove.