Estate planning is an established process for wealthy individuals to protect their financial assets. Its mass adoption was always hindered by its high cost, associated with expensive attorneys and law firms involved in the creation and update of the estate planning documents.
With the penetration of digital and online services in our lives, an important question arises – is estate planning really the answer for protecting our financial assets in the digital era? The answer to this question might be surprising.
How would your loved ones find your assets? Are they even aware of all of them?
This question would have sounded strange 50 years ago when most people possessed only a few, very static, asset types – a bank account, life insurance, and real estate, for the most part.
These days, this couldn’t be more different. And this holds true not only for the ultra rich but also for the average person. People open accounts in online trading applications, use digital financial services, and store information in online vaults and systems.
This complex and frequently changing picture of your assets makes it very difficult for your loved ones to even be aware of the existence of all your assets, not to mention knowing where they are and how to access them.
This is a major challenge for traditional estate planning, which assumes a very static picture of your asset catalog. Even if you have the perfect estate plan with a “catch-all” clause for your future assets, would your loved ones know what and where “all” is?
Even if you have the perfect estate plan with a “catch-all” clause for your future assets, would your loved ones know what and where “all” is?
You might think of sharing a link to online sheets or documents containing that information and commit to keeping it up to date, but would your loved ones remember the link 30 years from now?
Hardly, right? You are burdening your family with remembering that for years to come, which is hard to achieve. Not to mention that this simply doesn’t work if some of your beneficiaries are still children.
Traditional estate planning has another major flaw when it comes to protecting your digital assets – access to the assets.
How would your loved ones access your online and digital assets?
Even if you solve the problem of keeping your family up to date with your asset catalog, there is another hurdle for them which estate planning cannot help with. How would your family access your digital and online accounts?
These accounts are protected with passwords and often with additional security measures such as two-factor authentication or one-time passwords. This makes access for your loved ones extremely difficult.
In addition to this, many online financial services and platforms restrict access to the account owners. The fine print in their Terms and Conditions specifies that, with nice excuses such as KYC requirements, etc., which effectively prevents your family from accessing these accounts, even if they prove that the account owner is deceased and verify the family relationship. Nothing can make the financial services and platforms open the door to family members – even the most human compassion.
This is another reason why traditional estate planning can’t help you protect your digital and online financial accounts or protect your family financially.
Can digital estate planning services help?
Digital estate planning services definitely solve the problem of the high cost of traditional estate planning services, by an order of magnitude.
But, unfortunately, they can’t solve the other problems that we have mentioned – transparency for your loved ones and access to your digital and online assets.
Digital legacy management services are there to help.
Digital legacy management services solve all of these problems in very innovative ways. Let’s see how.
They enable people to securely and easily pass information about their assets to their loved ones.
Digital legacy management services enable people to not only keep their asset catalogs up to date but also designate their loved ones as beneficiaries and provide any information that will help the beneficiaries to locate and access the assets.
They detect when a fatal event has happened to the asset owner and proactively inform the designated beneficiaries about the assets.
Your loved ones don’t have the burden of remembering links to online sheets or where the information is stored. The digital legacy management services will proactively notify them about the designated assets and give them any additional info provided by the asset owner that will help the family members locate and access the digital assets.
Digital legacy management services ensure that your loved ones will be aware of your financial and digital assets, and will be able to locate and access them, should anything happen to you.