Don’t forget to include your digital assets.
Making your own well-being a priority feels great. Getting your life back on track with healthy eating, more exercise and maybe an overhaul of your living space can help you feel rejuvenated. Clearing away the mental and physical clutter can also help to bring clarity for whatever comes next – presenting the perfect opportunity to either create or revisit your estate plan.
An estate plan helps to ensure that your loved ones clearly understand your final wishes. Making a will is usually the starting point, but it’s a task that a lot of people haven’t tackled. According to an Angus Reid survey, 51 per cent of Canadians say they don’t have a will at all, while only about one-third (35 per cent) of Canadians say their will is up to date. Why is there so much reluctance? The reasons range from fear of the legal costs of creating a will to people simply thinking they don’t need one.
But estate planning also includes appointing an executor, assigning power of attorney, tax planning, charitable giving instructions, potential business succession strategies and collecting important documents for easy access when the time comes. Without a will, your loved ones are left to figure out what documents might be relevant and where to find them – a situation that is more challenging than ever because so much of this information is now stored digitally.
Your digital footprint
The shoebox full of financial statements, insurance policies and stock certificates is quickly becoming outdated. Bank statements, utility bills and quarterly investment or insurance updates have all traditionally been mailed to customers on paper. But as more companies make the switch to digital-only communication, you may now be receiving only emails with attachments, or a prompt to log in to a website portal for updates.
As we move closer to a paperless society, the convenience of less clutter does make it trickier for your loved ones or executor to figure out your affairs after you’ve passed on. As a result, there’s an essential need for digital estate planning. Without a digital estate plan, your executor could end up staring at a locked computer screen with no access to anything (because they likely don’t have the current password for your laptop or phone).
A successful estate plan in the digital age gives your executor more than just a clear set of instructions related to your final wishes. It also provides loved ones with the ability to access everything that may have been important to you, and (hopefully) to them as well. This includes family photos and videos, social media accounts and websites.
Create a digital inventory
Whether you’re just getting started or it’s time to review an existing plan, here are some steps to consider:
- Inventory your assets, such as property, investments and insurance policies. Include digital assets, such as rewards points programs, cryptocurrency wallets and monetized websites where you may be earning money for click-throughs.
- As you list your assets, make it clear for your executor or loved one where important physical documents are located. This includes your will, insurance policies, banking information, mortgage paperwork, investment certificates and any other legal information that might be needed to help settle your estate. Your advisor can help you determine all that’s required.
- For digital assets, you may need to leave specific instructions to permit log-in access. Be mindful of how sensitive information such as usernames and passwords are stored. Your advisor may have some suggestions for storing sensitive information as part of the estate planning process.
- Review the terms of service for any online accounts and find out what may be required for your executor to gain access. There may be an application process requiring a copy of the death certificate and a valid email address.
- Some social media sites also have an estate planning feature, where you can designate who can access your account after you’re gone. Note who has access permission in your digital estate plan to avoid any conflict or confusion among family members.
Estate planning may feel daunting at first, but breaking the tasks down into categories can help to make it easier. Here are some suggestions:
Memories: What are all the things that would be a shame to not have passed down to the next generation, such as photos, videos and social media sites? How would someone access these digital files?
Money: The list of online financial arrangements may be extensive, including electronic access to bank accounts and investment sites, cryptocurrency wallets, loyalty points programs, online ad revenue and more.
Records: What information, either physical or digital, will your executor require for the administration of your estate? This includes your will, financial statements and insurance policies, as well as contact information for your accountant, lawyers, advisor, business partners and key family members.
Our ever-increasing links to the digital world mean there are more details to remember in all three of the above categories. Spending a bit of time now to map out everything your executor will eventually need can help to make the process of winding down your estate a little easier for your family.
Estate planning is an important exercise that deserves regular attention, in order to help your family understand your final wishes. Contact your advisor and either begin the process of creating an estate plan or review what you currently have in place. Your advisor can be an essential part of helping you develop a plan that makes sense.
For more information on estate planning, check out these additional resources.