Managing Your Digital Estate – Transformation From Paper To Digital Society

Experienced estate planners and financial advisors will be familiar with a paper society and the tangible methods needed to do a stellar job. Over the years, society has transformed from paper to digital, and this has disrupted the industry.

Learning to manage your client’s digital estate is essential to stay ahead of the competition and do your work effectively. The transition to managing digital estate may present a few challenges, but there are effective digital solutions to make the conversion a breeze.

The Shift from Paper to Digital Society

Digital assets are a fairly new phenomenon. Consider that only two states directly address digital assets in a probate context (Oklahoma and Idaho). Even so, the focus on digital assets is increasing.

The Development of Digital

Thirty years ago, the World Wide Web went live to the world. Since then, technology and communication have developed at a rapid rate. The cellular evolution followed and before long, cryptocurrency became a common trade.

In 2020, the global digital asset management market reached a value of US $3.88 Billion. This figure is estimated to grow dramatically during 2021 – 2026. The emerging trend of digitization is driving growth.

There are several benefits to planning for digital assets, including;

  • An easy process for executors and family members
  • Prevent identity theft
  • Prevent the theft of content
  • Avoid losing the story of the deceased
  • Prevent private information from being leaked

In the past, these benefits didn’t carry the same weight as they do today. In the process, the job of the fiduciary has become significantly more challenging.

The Rise of Digital Assets

As technology has developed, assets and estate have taken on a new form. While the likes of tangible assets such as property and jewellery will always be around, there’s been an increase in digital assets that are a part of our everyday lives.

Most adult internet users have not considered their digital legacy, and only 13% aged between 50-64 have made mention of their digital estate in their will.

Examples of digital assets include;

  • Digital devices such as tablets, laptops, cell phones, thumb drives, portable hard drives, and even cloud storage
  • Online accounts such as online banking, subscriptions, streaming services, social media accounts, and business subscriptions
  • Electronic files such as digital photographs and videos, intellectual property, and cryptocurrencies

Learning to manage these digital assets is important to provide direction, maintain security and legally define beneficiaries. As an estate planner and financial advisor, it’s important to make your client feel at ease.

Challenges and Solutions to Manage Digital Estate

While digitization has certainly diversified assets, it’s also presented considerable challenges to a fiduciary’s ability to settle an estate.

Legislation Surrounding Digital Accounts

Digital assets are ever-expanding. In the process, they can present several legal speed bumps along the way. As digital estate planning is a relatively new event, the legislation is still catching up.

Most legislation pivots around privacy concerns, but digital estates are not always limited in this regard. In addition, the terms and services of the digital account provider can present a few unique challenges.

This challenge can be solved by taking an inventory of all digital assets. A trustee can be appointed to manage all of these digital accounts, and a digital estate solution can help to catalog and track these digital assets.

Dealing With an Expanse of Digital Assets

Digital assets are constantly expanding as the internet and technology continue to become ingrained in our lives. Trying to keep tabs on all of these assets can become burdensome and dissuade individuals from keeping up with their digital estate.

Consider the number of devices that are used to store personal information, the number of photographs taken on a daily basis, and how frequently passwords change. It’s not surprising that some find the process tiresome.

Again, drafting an inventory of digital assets and making routine updates to the list can help manage the growing estate. Suggest that a client updates the details of their digital estate on a quarterly basis.

The Instance of Incapacitation

The lack of planning for death or incapacitation can lead to lengthy legal battles and an added strain on the grieving period. Passwords and encryption can prevent assets from being accessed, and in the instance of incapacitation, there is no alternative to unlock these assets.

In many instances, licensing agreements between the digital service provider and the individual will prevent the transfer of a license or sharing of details.

Help clients avoid this unfortunate and uncomfortable circumstance by encouraging them to plan for their digital estate. Educate adult internet users and provide options to manage digital assets.

Client Safety Concerns

Would you hand over the password to all of your digital accounts to be stored in a single place? Keep this in mind when suggesting that your client make a plan for their digital estate.

There’s a good chance that your clients will be hesitant to hand over their usernames and passwords and store them in a single, consolidated space. One way to counter this challenge is to suggest two documents stored in two locations.

Understanding Online Afterlife Management Companies

It’s easy for online afterlife management companies to overstate their abilities. Helping a client understand the legal process of digital asset distribution is important to earn their trust.

Clients need to understand the risks of not planning for digital assets and be empowered to make wise decisions in preparation. Explaining the legal requirements and viable options is important for their final wishes to be fulfilled.

Digital Estate Management Platform You Can Trust

At Noni, we understand the concerns and apprehension that may come with managing a digital estate. We offer an effective solution to streamline the process while ensuring legal validity and optimal security. 

Find out more about our patent-pending, easy-to-use online platform that helps you and your clients stay on top of their digital estate.

Get access to Noni today, or book a demo to find out more.