Why digital assets are important in estate planning
When you look to the future, you may start to think about estate planning. Estate planning allows you to protect your assets for your beneficiaries after you are gone as well as in the present day.
It can be easy to think of physical assets that need taking care of such as family heirlooms, large purchases such as watches and the house itself. But, there are many assets that fall under the estate planning umbrella, one of which is digital assets. Here’s why digital assets are so important when it comes to estate planning.
What are digital assets?
Digital asset refers to anything that is stored digitally, such as email accounts, social media accounts, electronic business records and even photos stored digitally. You may think that online bank accounts count as digital assets, but the balance inside them actually comes under a different consideration.
These different items should be considered carefully when you undertake any estate planning.
Why are they so important?
Accounting for digital assets is important as your heirs or beneficiaries may not be able to access them once you have passed.
This means that precious family photos and the memories along with them could be lost. Your photos may include pictures of loved ones who are no longer with you, making them irreplaceable.
Furthermore, if you are passing on any form of business, either online or a physical premises, then you will probably have electronic files or records of some description. By ensuring your successor will have access to any business records, passwords and website domains, they will be able to continue the business as you would have wanted it.
What you need to be aware of
When it comes to estate planning, finding the right financial advisor to guide you through the process is key. You need someone who will be able to understand your estate as a whole, be able to execute your wishes in a legal document and advise you whilst keeping your best interests at heart.
There are ways you can make protecting your digital assets easier for yourself and your heirs. You can set up an online account which acts as an electronic safety deposit box. Here you can store all the usernames and passwords that you use across every website.
If you have a secure physical location, such as a safe or a safety deposit box at a bank, you could also create a physical list of passwords and usernames. This is not advised, however, if you do not have somewhere secure to keep it.