As our Kansas City estate planning attorneys can tell you, a personalized estate plan is more important these days. One reason is the more recent need for digital estate planning. What exactly is that? Digital assets are essentially any asset that is based on computers or involves the internet. For example, email accounts, social media accounts, and online businesses are considered digital assets. So, when you are working on your estate plan be sure not to overlook these unique assets.
Digital assets have become a popular commodity
With the rise in popularity of communications technology, digital assets have become a common part of nearly everyone’s estate. Consider that only a decade ago, many of us didn’t even own a cell phone, but now it has become an important possession. Cell phones have become our primary means of communicating, conducting business and a means of storing sensitive information. The phone may not be a digital asset, but the information it contains and can access is certainly a digital asset.
Why is digital estate planning even necessary?
Have you ever considered who should have the authority to access your email accounts and online banking after you pass away? What about protecting the information contained on your laptop, tablet or cell phone? Even simpler, does anyone else know that these various digital assets exist? Currently, there are thousands of people who sell items on eBay or through PayPal, accounts which are linked to your bank account. Someone you trust needs to have the information necessary to access these accounts, more importantly, they need to have the authority to use those accounts if you become incapacitated and can no longer do so yourself. After your death, your executor needs to know how to access these accounts, as well. Ultimately, you need to decide who will inherit them. This is the purpose of a digital estate plan.
Technology and the times have certainly changed
Estates in the past have included the basics – wills, trusts, powers of attorney, life insurance policies, and other property. Primarily, paper documentation has been the only method of recording estate planning instruments, which are typically collected and maintained in a folder in a safe or desk drawer. Maintaining records in this way made it easy for family members to find the necessary information after the individual’s death. Additional relevant information, such as bank statements and bills were easily obtained through the mail.
Currently, though, most of this information is maintained in digital form. This means that, in most cases, your financial, business, administrative, and personal documents will more likely exist in a digital form. Although the majority of people manage their finances, businesses, and personal lives online, few of those people actually have centralized accounts. The result is that managing and distributing these digital assets will not be easy once the owner passes away. Lack of organization can also lead to confusion and denial of access.
Although you could still have a business that exists in an actual building, there will still likely be digital assets tied to that business, including most often online access to bank accounts. In those cases, there will be substantial value in the ability to access the online aspects of your accounts. Online accounts provide simpler access to vital information that will likely be needed to settle your estate.
How a digital estate plan can benefit your family
There are several aspects of a digital estate plan that can be very beneficial to your family. For example, our Kansas City estate planning attorneys can help you gather the necessary information to allow your family to locate your online accounts and actually have access to those accounts and the information they contain. Your plan can help you determine whether there is any digital property that has financial value. It can also distribute or transfer your digital assets as you see fit.
Why it is important to plan ahead
Preparing for the future is an important goal in life. But, when it comes to your estate, planning ahead gives you the valuable opportunity to determine now who should inherit your assets after your death. Estate planning is also a great way to reduce your estate taxes. Incapacity is something else that needs to be considered in estate planning. Whether it is temporary or permanent, your family must have the tools they will need to help you through that incapacity. They need the authority to handle your affairs for you until you are able to do so yourself.
If you have questions regarding digital assets, or any other Kansas City, Missouri estate planning matters, contact Gaughan & Connealy for a consultation either online or by calling us at (816) 974-3030.