In our new "10-Minute Money Move" series, we're highlighting one digestible to-do each month that can help you take control of your financial life—starting now.
Today we're kicking it off by bringing your financial life into the digital age.
Seems like every month brings with it another set of events you have to scramble to buy gifts for: showers, birthdays, weddings, anniversaries. The gadget your dad's been eyeing for months? Check. A signed copy of your brother's favorite book? Double check.
But amid all the pressure to pick out the perfect present, many of us forget about the most important gesture of all: giving your family one particular financial gift that will last even until the next Apple product announcement.
Get started with a free financial assessment.
Get started with a free financial assessment.
We're talking about proper estate planning. Because even though no one likes to think about it, part of caring for your family means making sure everything's squared away after you’re gone.
Not sure how to tackle such a daunting task? We'll help ease you into it with a simple to-do you can complete in just 10 minutes flat: Protect your digital assets.
Why It's an Important Move Think about it: In a world where you can pay for your lunch, review your bank statements and store your entire family photo album all on your smartphone, digital assets are more plentiful than ever—and you might not even realize the full extent of the cache you've collected.
In fact, one McAfee study found that the average person has amassed $35,000 worth of assets on various devices—everything from sensitive personal records to iTunes libraries—yet 63% of Americans say they have no idea what will happen to them once they pass away.
But digital estate planning is about more than just accounting for your cash—it's also about protecting assets with personal value. “One of the biggest mistakes someone can make is to ignore digital assets when developing their estate plan," says Tom Gilmour, a CFP® at LearnVest Planning Services. "Even if your digital assets don't have monetary value, they may have great sentimental value to you and your family—like photos or videos you want to pass down."
How to Get Moving To begin, brainstorm a list of all your digital assets, including social media accounts, emails, retail accounts like Amazon and Netflix, digital payment tools like PayPal, and any other personal info stored on your computer. Then pull together an inventory of the log-in IDs and passwords associated with each of these accounts.
Once you’ve compiled this data, you'll need to securely store it in one place. A good option to consider: PasswordBox, a free identity manager that consolidates all of your crucial log-in info into one "Legacy Locker." After your death, it's securely transferred to your designated "digital heir," who can collect the various assets and cancel any accounts you instruct to have deleted, like your credit-card-linked Seamless account.
While you're at it, take a few minutes to review your social media and email account policies. Facebook gives family members the option of memorializing, downloading or deleting a deceased loved one’s account. Similarly, Google’s Inactive Account Manager can be set up to email certain data to loved ones—or simply delete your account—after a certain period of inactivity.
Congrats! You've completed your 10-minute money move for the month, helping to give your family the gift of peace of mind later on.
“If you have specific wishes for your assets, you can't assume they will be carried out. You need to clearly spell them out, and appoint a digital executor.”
Have a Few More Minutes to Spare? If you're eager to take even more control of your online assets, consider appointing a digital executor to your will.
“If you have specific wishes for your assets—say, you want your personal website taken down—you can't just assume they will be carried out,” Gilmour explains. “You need to clearly spell them out, appoint a digital executor, and carefully read providers' terms of service periodically to make sure there is no potential conflict.”
But note that a digital executor won't replace a traditional executor to your will, and laws vary by state. "So it may be a good idea to consult a local estate attorney to determine where things stand in your state, and how best to document your wishes," Gilmour says. One other thing to keep in mind: The digital executor you select should be someone who's both trustworthy and tech-savvy enough to carry out your wishes.
With a plan now in place for your digital assets, you can focus on the fun stuff—like spending quality time with those loved ones. Now that's something we can "like."
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.