EXPATS & THEIR FINANCES – This Is How to Avoid Problems When Passing Digital Assets to Your Heirs
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- April 11, 2024
(Passing digital assets to heirs can be unnecessarily complicated and time consuming unless you do some of the egwork upfront.)
Not long ago, digital assets played virtually no role in estate planning. Today, however, leaving an electronic mess can be one of the most costly mistakes in the process. Failing to account for digital assets and electronic lives can result in a long list of problems for your heirs to deal with before they receive their inheritance. Nowadays, this can be easily avoided since, for the time being, estate planning law has finally caught up to technological developments. Most states have enacted the Uniform Fiduciary Access to Digital Assets Act or something similar. This law makes it possible for executors to manage virtual currencies, web domains, computer files, and more unless a document specifically prohibits access. However, the law has its limits. Here’s how you can facilitate the process of passing digital assets to your heirs:
Create a Basic Strategic Digital Inheritance Plan
It makes sense to give the executor unhindered access to financial accounts and assets necessary for settling the estate. Some people find it easier giving an executor who has authority to log into every account, since that will avoid any potential confusion and make the transition as simple as possible. This entails finding someone you trust and with whom you are extremely comfortable.
Create a Thorough Inventory of All Digital Assets
There is more to the digital inherence process than selecting who has access to your various accounts. Take account of your digital life and create an inventory of assets, which means any account or service protected by a password. This could mean anything from your smartphone to medical records stored online.
Remember automated payments, as these will also need to be accounted for to avoid interruptions in service.
Streamline the Process of Granting Account Access to Heirs
Many online service providers let you designate who has access to the services after you pass away. This includes Google, Apple, and Facebook. Using these features will make it easier to transition ownership, so make sure you have your heirs identified—both with service providers and on your own legal documents.
Another best practice to consider is using a password manager to save access to your various digital assets. This way, you just need to grant access to the manager, rather than each individual asset. However, you should still have directions for accessing the assets saved somewhere in case something happens with the password manager.
For more information, please contact one of the experts at New Century Planning Associates: rryerson@newcenturyplanning.com
New Century Planning Associates is a full-service financial planning firm comprised of several experienced professionals who came together many years ago to work as a team. New Century Planning’s team of CPAs, CFPs, attorneys and insurance and investment pros are independent and can, therefore, “shop the market” for their clients in order to provide first class, comprehensive services.