Why should I create a digital estate plan?
Historically, a person's estate has consisted of a will, trusts, power of attorney appointment, life insurance policies, and any property that a person owned, including financial accounts. In the days of paper documentation, these items would usually be collected in a folder or binder in a person's office, safe, or desk drawer, where the family would be able to easily find them after the person died. Any items that weren't included in this primary bundle could be identified through paper statements that arrived in the mail: bank statements, bills, and account updates, for example.
These days, many of the records documenting an estate may be entirely digitized. While paper versions of formal legal documents may still be saved in a person's home or with an attorney, many financial, business, personal, and administrative documents may primarily exist in a digital form. And while many people manage their finances, business, and personal lives online, very few have organized or centralized those accounts. This can make managing and distributing these assets difficult after the person has died, and can lead to confusion for family members, denial of access, and even an inability to locate the accounts or information in the first place.
Even if certain digital assets are tied to brick-and-mortar businesses, such as online access to a bank account or online management of home utilities, there is still significant value in being able to access the online components of these accounts. Not only can the online accounts allow you to manage any services or ongoing payments, but they can also provide easy access to key information that may be necessary in settling the estate.
How can a digital estate plan help my family after I'm gone?
By creating a digital estate plan, you can help your family more easily:
- Locate any accounts you have online
- Access those accounts or the information in those accounts
- Determine if your digital property has any financial value that needs to be reported and perhaps submitted to probate
- Distribute or transfer any digital assets to the appropriate parties
- Avoid online identity theft
If you're interested in creating a digital estate plan, see our article How to Create a Digital Estate Plan.