In an increasingly digital world, is it any surprise that estate planning would also become more digital?
Our assets aren’t all just paper assets or tangible physical assets anymore. Many people have online accounts, websites, domains, and other digital assets worth money.
So what to do in the digital age? The Wall Street Journal recently reported that the estate planning industry hasn’t quite figured that one out just yet.
Back in the good old days when life was simple, all you needed was to list your bank account numbers. With online passwords and accounts, it's becoming increasingly important for estate planners to take note of these items when planning.
Where this could be most problematic is in the area of incapacity. When a power of attorney kicks in, not all online companies have policies in place to allow another person access to an account. The result could be the continuation of certain automatic payments or the inability to stop service on an account.
Other issues that come up with digital assets is the fact that many people simply don't remember to factor these assets into their estate plan. Digital accounts are easy to create and easy to forget. But when your forgotten eTrade account could hold thousands of dollars, the inadvertence could be costly. Similarly, now people own digital libraries of music and photos.
There is no bright line solution on how to handle digital assets. People don't like to disclose their passwords and even if they do disclose their passwords, passwords can change.
The takeaway here is to think about digital assets when planning your estate. Factor in those online accounts, write down all your passwords and have a plan that makes you comfortable.