Estate Planning For Your Digital Assets
Visiting the doctor for my annual medical checkup has become second nature to me. And as an accountant, meeting with my medical professional clients and their spouses to conduct their annual financial checkups is something that I too prescribe.
At a recent client and spouse meeting, where we were discussing wills and estate planning, the topic of how to deal with digital assets and digital estate planning came up. This couple were well aware of the value of having proper wills and powers of attorney in place: several years back, they had a rude awakening with the loss of a family member who did not have a proper will or estate plan. But fast forward a few years, and this couple was now also living in a brave new world where they handled most of their banking and financial dealings online, conducted research, had Facebook accounts, shared family photos online and so on. Along with coming up with a plan for their tangible assets, they now had a barrage of questions for me about how to deal with their digital assets as well.
Digital assets are not just for the "kids." Research shows that just over three quarters of baby boomers and over half of those aged 65 and older are spending significantly more time online than before for things like online banking, watching videos, sharing photos and engaging in social media.
Knowing my clients and appreciating their past family experience, I knew I could not leave that evening without covering the topic of digital estate planning in some detail. I left them with an outline of a plan to incorporate digital estate planning into their overall strategy. First, I covered the meaning of digital assets. Second, we addressed the importance of having a digital estate plan. And thirdly, we addressed the various aspects of such a plan.
What are digital assets?
Wikipedia defines digital assets as any item of text that has been formatted into a binary source that includes the right to use it. In simpler terms, it includes all your electronic possessions (financial and social). Typical digital assets include:
Social network accounts, such as LinkedIn, Twitter and Facebook, etc.; Websites; Online account information for other websites and programs; Videos, such as those posted on YouTube; Photos; Email and webmail; Financial documents, such as those used for banking, investments and utilities; Online businesses such as on eBay or Etsy; and Personal documents. With respect to your digital estate, an executor would...
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