The importance of including digital assets in estate planning is becoming increasingly evident in today’s digital age. Not only do we need to think about our physical possessions, but our digital footprints now require equal attention. The digital realm is vast and diverse, from personal memories stored in emails and photos to online financial accounts and even unique digital assets like cryptocurrency and NFTs.
Why Digital Assets Need Protection
Several compelling reasons underline the need for careful management of our digital estate:
- Protection Against Identity Theft: Safeguarding our digital assets can significantly reduce the risk of posthumous identity theft.
- Ease for Executors: Detailed instructions and access can make the daunting task of managing a loved one’s digital estate significantly more straightforward.
- Preservation of Legacy: To prevent the loss of personal histories, stories, or significant digital assets, like cryptocurrency, which can become inaccessible due to forgotten credentials.
The Challenges of Modern Security Features
Modern security features, while offering enhanced protection during our lifetime, can pose hurdles in estate management. Biometric authentications and two-factor verifications are common examples. Case in point is Apple’s Digital Legacy Feature. For users who don’t proactively set up their digital legacy, accessing the Apple ID of the deceased may require a detailed court order. However, Apple has pioneered forward-thinking solutions with its “Legacy Contact” feature. Posthumous access to an Apple account becomes seamless by simply pre-assigning a legacy contact, needing just a death certificate.
Different Platforms, Different Policies
Digital platforms vary in their posthumous access policies:
- Financial Platforms like Venmo and PayPal: These platforms usually require proof of death and verification of the executor’s identity and authority. Any assets held within these accounts form a part of the estate, subject to taxation and inheritance protocols.
- Social Media Platforms like Facebook: Policies differ, with each platform having its guidelines for account access and data management upon a user’s death.
Best Practices for Digital Estate Planning
Estate planners emphasize the need for proactive digital estate management:
- Delegate Early: Appoint trusted family members or friends to oversee your digital assets.
- Maintain an Updated Password List: While maintaining a written record of passwords can be helpful, they may become outdated quickly due to frequent changes.
- Stay Updated: With platforms continually evolving their user agreements and features, like Apple’s recent addition of a legacy contact option, it’s imperative to regularly revisit and update your digital estate plans. Ideally, consulting with a qualified estate planner annually or every few years can ensure your digital assets are well-protected and efficiently managed.
In conclusion, as our lives become more intertwined with the digital world, so does the necessity of ensuring our digital estate is in order. Proper planning and regular updates guarantee a smooth transition of your digital legacy to your loved ones.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or connect@lptrust.com.
This newsletter is provided for informational purposes only.
It is not intended as legal, accounting, or financial planning advice.
