When my wife and I wrote our wills a few years ago, there was something we did not include: digital assets.
So much of our lives are carried out online, our digital profile and footprint have become as important as the paperwork that shows we own our house.
Digital assets include everything from devices such as smartphones and laptops, to your Facebook account, online bank login and even all your Word documents. In short, all the things we use every day and which store our most sensitive and personal information.
Yet when I question my clients, I would be generous if I stated that about 10 percent had included digital assets as part of their estate plan. Many just assume that they are not something to pass on or do not have any value.
So, while you might have considered, for example, who will inherit your extensive collection of smelly shoes, most make zero plans on how people will log into bank accounts and social media accounts to just name a few.
My physical photo albums are stored externally, but my digital photos (which have become astronomical over the years and contain everything from birthday celebrations to out-of-focus close-ups of my nose) are stored on phones and computers. If these cannot be accessed, some valuable memories could be lost.
But, as you know, in life, nothing is straightforward. And that means there is a conundrum.
You see, we are all told not to write down or share passwords. In the event that you are defrauded, your bank could even refuse to compensate you if it decides that you have been lax with any of your passwords or logins.
Some passwords need constant changing, so this could become an administration nightmare of gigantic proportions.
You might think that none of this matters. And to a certain extent, you may be right. After all, do I really care what happens to my Instagram account after I’m gone?
But estate planning is more about minimising the mess you leave behind for your loved ones to deal with.
But I know of instances where people have died, and on Facebook, loved ones can see messages sent to the person who has died wishing them a happy birthday, sometimes a few years after they have died
Without a list to work from, an executor will find it difficult to know just how many accounts you have, let alone whether they contain assets. The fact that many of our accounts and bills are now “paperless” might make life easier, but it can be a problem after you die.
Another issue is fraud. Social media accounts can be hacked and hijacked, and this can be particularly distressing for relatives if the victim has recently died. Most social media sites also will not remove the profile of someone who has died unless you can prove that you have permission to do this.
We recommend that you appoint a legacy contact on social media accounts. This gives a named person the right to remove my account when you die if they choose to. Finally, storing all the details in a password manager (we use Lastpass), and it is the most secure way to pass login details and provide a list of digital assets.
Digital assets form part of your estate planning. It is step 9 of our 9 steps to working less, having financial freedom and building wealth. If you would like more information on this email Hitesh at hitesh@wowadvisors.com.au or Ros at ros@wowadvisor.com.au. Or call us on 07 3161 9548.
