Managing Your Digital Estate – Transformation From Paper To Digital Society
May 27, 2021
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
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.