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You have an Estate Plan...

But do You Have a "Digital Estate Plan?"

In the past when it came to estate planning, most of the assets a person left behind were tangible, like real estate or personal possessions—or they were financial, like savings or investments. Over the past decade however, much has changed. Now, as we celebrate the 10-year anniversary of both the iPhone and Facebook going mainstream, a new class of assets has emerged: digital assets.

The term "digital assets" basically refers to anything that contributes to your digital presence. This can include a variety of digital accounts, such as online banking and investment accounts, social media accounts, medical accounts, credit card accounts, shopping accounts, etc. It can also include any data you have stored in the cloud or on hard drives, as well as any of your digital personal devices—all the things your loved ones will need to access in the event of a medical emergency or your death. If you have not created a digital estate plan, now is the time. The information below will help you get started.

Planning your digital estate

The first step to planning your digital estate is to take stock of your digital properties, and then make a note of the access credentials associated with each one. You probably have already created a list like this to some extent—it is nearly impossible not to considering how may passwords we are expected to juggle on a daily basis. Nevertheless, it is easy to omit or forget to update your newest or most frequently used passwords. That's why it is important to formally evaluate all of your digital assets to verify whether you have accounted for all of them. Chances are one or two important ones are either missing from your list or their access credentials are not up-to-date.

When creating your list, be sure to include passwords not only to your online accounts, but also to any devices you own or applications you use. Make sure you include any other information that may be needed to access your accounts, like answers to security questions or email addresses that were used when you registered. You should also consider adding to your list things like network passwords or combinations to any safes—anything that will make it easier for your loved ones to access your personal information if they need to. Remember to review your list periodically to ensure the information is current and that all of your credentials are included.

Recording and storing your assets

After you have taken stock of your digital assets, the next step is to choose a method for recording your list and storing it. One of the least secure and least practical—but still often used—methods for saving your list is on paper. While it is better than nothing and you can always secure it in a safe or locked drawer, paper lists are difficult to maintain and therefore will almost always be out-of-date. If you choose to save your list on paper, try to save your passwords on a separate sheet and in a separate location.

Another more popular method for storing passwords might be to use a note-taking application or Excel spreadsheet. While that is still not the most secure way, it is more practical and safer than paper. Not only are electronic documents easier to maintain, but you can protect your computer with a strong password. Many electronic documents like Excel spreadsheets can also be protected with a password. (To learn how to password-protect Excel spreadsheets, click here.)

While paper and spreadsheets are common, one of the best ways to store passwords is to use an application or service designed specifically for that purpose. Popular applications like LastPass or 1Password use strong encryption technology to protect your information. They also have browser extensions and widgets that make maintaining and sharing your lists easy. And, they let you grant "emergency access" to a friend or loved one should the need arise. Online services like Everplans and Final Roadmap (among others) take it a step further by acting as "digital executors" and distributing your digital estate when the time comes.

Determine who has access and when

After choosing your storage method and safeguarding your list, the next step is to determine who has access to your assets and under what circumstances. That may require separate lists for different people in your life, like business associates or family members who share a particular asset. It may also require that you give someone access to specific assets or online accounts in the event of an emergency, so that they can help you maintain your estate and access important insurance information if you need medical care. Or, you may decide you only want loved ones to access your digital assets after you die. Whatever the case may be, it is important that you establish a formal plan in order to make your wishes known

Consult a professional

Taking inventory of your digital assets and determining how they should be distributed is a good first step, but to guarantee that your assets are managed according to your wishes, you should make sure your estate plan is legally binding. There are several online services that can help you with that. However, considering the fact that state and federal laws in this area are complicated and confusing, you are better off consulting an estate planning professional in your area. Chances are he or she will be knowledgeable about your state’s laws and able to guide you through the process.

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