When creating your estate plan, it's tempting to focus solely on the physical assets like property, investments, and heirlooms that will one day be passed down. But in our increasingly digital world, online accounts and virtual possessions now form a hidden cornerstone of many people's estates.
Failing to make arrangements for these "digital assets" can have devastating emotional and financial consequences according to a troubling new report from STEP, the leading association for inheritance planning professionals globally. Their survey of over 500 practitioners unveils a sobering reality - digital assets left adrift online are now routine sources of distress and disputes for grieving families.
What precisely comprises these digital estates? Email accounts, social media profiles, photos or videos stored in the cloud, online gaming artifacts, cryptocurrency wallets, domain name registrations, and more. Whereas our parents may have left behind a house, car, and photo albums, future generations risk leaving sprawling digital paper trails dotted across the internet.
And herein lies the trouble. Unlike a house with a deed, many digital assets have questionable legal ownership status. The terms of service for platforms like Facebook and Gmail often grant limited licensing rights rather than outright asset ownership. Family members might logically expect access to reminisce through years of posts and correspondence, only to have providers block them. Photos, messages, and memories can suddenly vanish into the ether.
The impact documented in the report is sobering. Nearly a quarter of advisors surveyed said clients had experienced difficulties accessing accounts of deceased loved ones. Respondents cited extreme distress and frustration at suddenly losing access to sentimental digital objects like family photos hosted in the cloud. Even well-meaning platforms like Google and Apple can seem obstinate gatekeepers.
But it's not just an emotional blow bereaved families suffer. Losing access can derail entire estate administrations. When critical financial details are stored digitally across fragmented online accounts, administrators can struggle reconstructing the pieces. Being locked out makes appraising assets or settling debts vastly more difficult. Costly legal fights frequently ensue.
So what's the remedy? In a word: planning. Like any prudent estate strategy, individuals need to take responsibility for their digital assets in advance and put arrangements in place. Yet only 17% of advisors surveyed had personally used tools Google, Facebook and others now provide to designate post-mortem account access. Just 6% felt there was a clear process in their country for heirs to reliably claim digital possessions. Considerable work remains modernizing both technology and regulation around this issue.
Nonetheless, some best practices do exist for securing your online afterlife:
- Document your digital assets and accounts along with traditional possessions when making estate plans.
- Formally record your wishes for account access, asset transfers, or account deletion requests after your passing. Name specific online platforms.
- Share access credentials like passwords securely to expedite post-mortem access. Rotation, encryption, password managers and trusted intermediaries help mitigate risks.
- Formally designate "digital executors" to manage your digital presence.
The price of neglecting digital assets gets steeper every year. Forgetting them in your planning can sabotage even the most carefully constructed legacy. As digital footprints grow exponentially across social platforms, storage lockers and crypto wallets, keeping your online house in order emerges crucial for your loved ones' financial and emotional well being. Heed the troubling lessons from early victims, and ensure your digital assets don't haunt your survivors.
Don't let overlooked digital assets upend your legacy. If you have concerns about how your online accounts, virtual possessions or digital life might impact your Orange County estate plans, consult an advisor who understands these modern complexities.
The Law Office of James Burns helps Orange County families properly integrate digital assets into their estate planning and administration. With deep expertise securing digital legacies, James provides practical guidance on posthumous access controls, online asset distribution, and avoiding digital estate disputes.
Contact James today at (949) 305-8642 to discuss your legacy's digital dimension. Proper planning today brings your loved ones tomorrow the peace and access they deserve. Don't let digital assets create unnecessary burdens for your survivors. James can help you tie up all loose ends in the digital age.