Why do we need a Will?
The primary reason people around the globe prepare wills is to protect their digital and financial assets by specifying how their inheritance will be distributed.
Testators can specify as beneficiaries their loved ones, as well as other people, organizations, or charities. They also nominate witnesses for the will, as well as executors, who will have the responsibility of settling their legacy according to the preferences specified in the will.
Without a formal will, the future of your legacy will depend on the unpredictability of local legislation. The lack of a will might also create tension between your beneficiaries and might damage long-term relationships. Stories of beneficiaries who cannot split common real estate, for example, are endless.
Problems with Traditional Wills
Having a will sounds great, right? But unfortunately, traditional wills have multiple problems.
Your loved ones won’t know where it is
You’ll definitely tell your loved ones about the will and where you’ve stored it, sure. But what are the chances that they will remember it 30 or 40 years from now?
Not to mention the additional complications if your beneficiaries are in other cities or countries. Chances are high that in the far-distant future they won’t remember your will, and they most definitely won’t be able to find it.
We are living in a world where people have dynamically changing asset catalogs. You:
- open a new account in a mobile bank,
- have stocks or options in a company,
- have a digital wallet,
- open an account in an online trading platform,
- buy new real estate.
People these days constantly update their portfolio of assets, often without even noticing it.
Think about what assets you possessed 10 years ago and what you have now. You can see that wills can become obsolete and of little value to your loved ones.
Risk of damage or theft
Storing your will at home in a drawer incurs the risk of being damaged by mistake or through an accident such as fire. There is also a risk of theft, and of course, if you move house, there is always a risk of losing or damaging your will during the relocation.
Not suitable for digital assets
Many of the assets that people possess these days are digital. Even the physical assets often have digital access.
Traditional wills don’t have a register of the digital assets of the testator, which often presents a big problem for the beneficiaries in their effort to identify and locate the various digital assets.
These are major problems but should not be surprising. We’ve seen, in the last several years, a big adoption of technology in other sectors, for example, fintech – with neo banks and online trading platforms – as well as in the insurance domain, with a plethora of insurtech apps and digital insurance brokers. But estate planning and law in general didn’t adopt many of these technological advances. They were slow to adapt to the new world. And it’s not surprising that they are not prepared to meet the needs of contemporary users who want to protect their assets through a will.
What is a Digital Will?
Digital wills are also known as e-wills or online wills.
Digital wills are created by online services, and the final document is the same as a traditional will: the testator designates beneficiaries, specifies witnesses, executor, place, date, and special clauses, acknowledges that they are of sound mind (confirmed by the witnesses), etc.
While digital wills produce the same end result as traditional wills, they have many advantages over traditional wills.
Advantages of Digital Wills
A digital will can be more easily updated.
Usually your will needs to be updated multiple times during your life, for example:
- When your preferences have changed
- Due to various events such as the birth of a baby, marriage, or divorce
- When your catalogue of assets changes – which, as we discussed, happens quite often nowadays.
Digital wills enable users to easily update their will, which often takes 10-15 minutes, which is nothing compared with the lengthy and expensive process of going to your lawyer.
You can create your will and start protecting the digital and financial assets in your estate from the comfort of your couch.
Usually, in the process of creating of your digital will, you answer several questions regarding your assets, designation preferences, family situation, etc., which guides the service to generate a personalized will for you.
Are Digital Wills the perfect protection of your legacy?
Digital wills have many advantages over traditional wills.
- way faster and cheaper to create,
- easy to update and maintain,
- easy to share with your beneficiaries.
But they are not perfect, either. The primary problem which they still do not solve is enabling your loved ones to identify and locate all your digital and financial assets.
If I have a general “catch-all” clause in my will that all my bank accounts are inherited by my wife or my children, am I sure that they’ll know about all my bank accounts? What about digital assets such as stock portfolios, online trading platform accounts, digital wallets, company shares, etc.?
Your beneficiaries might have your up-to-date digital will, but chances are high that they will still have a hard time identifying and locating your digital, physical, and financial assets.
Combining a Digital Will with Digital Inheritance
Digital inheritance services enable people to have a digital register of their financial, physical, and digital assets. They enable people to designate beneficiaries to each of their assets and ensure that the beneficiaries will be informed about the designated assets in the case of a fatal event happening to the user.
Digital inheritance services detect fatal events through a protocol of various checks, which include multiple verifications through email, phone calls, detecting activity on selected social networks, etc.
All these various means are needed to ensure false positives are avoided at all costs. If you don’t reply to a series of emails, don’t answer your phone in a series of phone calls, and are not active on your favourite social networks for several months, chances are high that something has happened to you.
The biggest advantage of digital inheritance services is that they inform your beneficiaries proactively. Your loved ones don’t need to remember access details, info about assets, etc. If a fatal event occurs, they’ll know about your assets and will be able to identify and locate them.
Combining a digital will with a digital inheritance service has another big advantage. Many of the assets that people possess these days are digital. For these, people also need to know certain details such as access passwords and URLs.
Modern digital inheritance services are also secure document and password managers. They enable users to associate certain digital assets with passwords that are protected through the service. In this way, the beneficiaries receive full protection: they have an up-to-date digital will, they are able to identify and locate the assets, and they are provided with any special access details to these assets.
The combination of digital wills and digital inheritance services is a major step towards ensuring peace of mind for those who want to protect their digital and financial assets and ensure their loved ones are financially secure.