How to Create a Digital Estate Plan

This content has been reviewed and edited by an Investment Advisor Representative working for Global Predictions, an SEC-registered Investment Advisor.

In an era where many aspects of our lives are tied up online, understanding how to securely transition digital assets is vital. This guide introduces steps to craft a digital estate plan that effectively communicates your wishes regarding your digital presence after you're unable to manage it yourself.

Why Is a Digital Estate Plan Essential?

A digital estate plan clarifies your intentions for each piece of your online existence after your death or incapacitation. From personal social media accounts to professional networking profiles and your digital financial holdings, having a plan is a proactive step towards comprehensive post-life planning.

What Does a Digital Estate Plan Cover?

This plan encompasses all online dimensions:

• Communications: Email accounts and messaging platforms.
• Social Media: Ensure your online social personas are handled according to your wishes.
• Online Financial Services: Includes bank accounts, investment accounts, and cryptocurrency.
• Entertainment and Cloud Storage: Streaming services accounts, online libraries, and data storage options.

Steps to Creating a Thoughtful Digital Estate Plan

1. Document All Your Digital Assets

• The first step is to list your digital resources. This can be broadly categorized into accounts related to finance, communication, social media, and entertainment.

2. Articulate Your Desires for Each Asset

• Reflect and decide how each asset should be managed. Do you want your social profiles archived or deleted? Should a trusted contact manage your online businesses? Here, the objectives might vary widely, and detailing your preferences is crucial.

3. Appoint a Reliable Digital Executor

• Designate a digital executor to carry out your wishes pertaining to your digital assets. This role requires careful consideration—a trusted individual, preferably with a reasonable understanding of digital platforms, who agrees to uphold your instructions.

4. Legal Validity and Security Measures

• While constructing your digital estate plan, it's crucial to ensure that it abides by the laws applicable in your jurisdiction. Consulting with an attorney experienced in digital estate planning might be beneficial. Remember, the terms of service for various digital platforms could impact your planning.

5. Update Your Digital Estate Plan Accordingly

• As your digital footprint changes, so should your plan. Periodic updates ensure that newly accrued digital assets or changes in your life's circumstances are reflected in your instructions.

Granting Access to Your Digital Executor

When planning how a digital executor will access your accounts, think about the balance between security and practicality. The process isn’t just about handing over passwords—it involves strategic planning to ensure that your digital executor is empowered to manage your digital assets lawfully and in accordance with your wishes. Here’s how you can structure this:

1. Legal Documentation and Permissions: Make sure your digital executor is legally authorized to act on your behalf. This might require including specifics in your will or a separate digital estate plan that outlines their authority. They'll likely need access to these documents, along with your death certificate, to prove their right to manage your accounts when contacting service providers.
2. Secure Password Management: You could use a digital password manager to maintain your account credentials securely. In your estate plan, include instructions for accessing this tool after your passing or incapacitation. This method is secure and mitigates the risks associated with physically noting down or emailing passwords.
3. Understanding Service Provider Policies: Online platforms each have their own procedures for deceased users' accounts. Services like Facebook allow accounts to be memorialized, while Google's "Inactive Account Manager" can provide access to nominated individuals after a period of inactivity. It's important to integrate this knowledge into your planning.
4. Instructions for Special Circumstances: Provide clear directives for handling high-security or high-value accounts, like those for cryptocurrencies or business dealings. This ensures your digital executor knows exactly how to manage these without additional legal hurdles.
5. Regular Updating: Keep the information required for executor access up to date with the rest of your digital estate planning. Regular revisions will accommodate new accounts or changed rules, maintaining the effectiveness of your instructions.

By carefully planning the access your digital executor will have, and by regularly updating these details, you ensure that your digital legacy is preserved and handled appropriately, in line with your wishes.

Leveraging Digital Tools for Effective Estate Planning

Although tools like PortfolioPilot do not specifically manage digital estate planning, they can serve as valuable resources in understanding the broader scope of your digital financial assets. These tools provide an aggregated view of your entire portfolio, which may help in considering what comprises your digital estate, or even passing on information.

Beyond Planning: The Future of Digital Legacies

As we consider the future of digital legacies, it's important to reflect on how the evolving perception and handling of online assets might influence estate planning practices. The ongoing development of digital estate planning could potentially lead to clearer mechanisms and policies, which could support smoother transitions and ensure final wishes are respected. Through thoughtful planning and the judicious use of available resources, you're not only organizing your digital life but also safeguarding your digital legacy.

In crafting your digital estate plan, it’s wise to view this as a continually evolving document. This approach can provide peace of mind and assure that your online and digital financial assets are handled as you see fit, aligning with our views on the importance and methodology of digital legacy management.