When clients and their advisors undertake legacy planning, they all too often overlook a new but important aspect of modern life: digital assets.
“It’s a critical part of everyone’s estate and something people have ignored,” says Bob Mauterstock, a financial advisor and author of Can We Talk? A Financial Guide for Babyboomers Assisting Their Elderly Parents.
Failing to account for online assets when planning one’s estate can cause major headaches for family members, as they hunt in vain for lost passwords and vanished accounts. Laying out what a client has, where it is and how to access it can prevent needless frustration. But all too often, Mauterstock says, clients neglect to keep a comprehensive and current list that includes passwords and log-in details.
“If you don’t, and you’re gone, then your family is going to have a very difficult time finding and accessing all those accounts,” the advisor warns.
Death isn’t the only circumstance where such planning pays off. Christine Courtnage, a wealth strategists at U.S. Trust, notes that it is equally important to document a client’s digital assets in the event that an accident or illness leaves the client incapacitated or unable to communicate with their family. U.S. Trust helps its clients create digital worksheets to lay out this information in case it is needed. Courtnage also urges that clients and advisors pay attention to privacy laws in the state where they reside, as these may require an heir to have power of attorney to access certain files.
“If something happens to an individual, someone needs to be able to penetrate and retrieve these assets,” she says.
For clients who may be reticent to draw up a digital roadmap or don’t see the value in doing so, Mauterstock suggests prodding them with simple questions like ‘Do your spouse and children know how to access all of your accounts?’ and ‘Do you have digital copies of your marriage and birth certificates, and will your heirs know how to get at them?’ Doing so will open up the conversation and bring home its importance.
But the best move an advisor can make is to get clients to create a list of their digital assets at their first advisory meeting.
“When clients come to you, it’s easiest to get all the information up front,” Mauterstock says. “It will really impress them, because no one else is helping them plan for this. And their spouses are going to be really grateful.”