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Estate Planning in the Digital Age: New Challenges

Posted on in Estate Planning

Traditional estate planning has always involved the creation of documents designed to avoid costly and lengthy probate proceedings and minimize taxes, such as wills, trusts, and other related documents. However, estate planning attorneys are facing new challenges as an increasing amount of people store their financial information online and handle their assets digitally. As these digital assets are typically secured behind usernames, passwords, and security questions that surviving spouses and family members may not be aware of, dealing with or even finding these assets following a person's death can be difficult or even impossible in some circumstances.

According to a recent article in Smart Money, 36% of adults aged 45 and older are now doing banking online, and those numbers continue to grow. Unfortunately, traditional estate planning documents tend not to address online accounts, and the estate-planning industry has been slow to advise its clients about the need to address and deal with these digital assets so as to properly preserve them for their heirs in the future, and to ensure that those assets are not lost altogether.

Digital assets might include things like online bank and brokerage accounts, online businesses, domain names, blogs, tax returns that have been e-filed, and bill-pay services. The danger of not addressing these items not only lies in surviving family members missing out on valuable assets, but also in an inability to stop automated bill payments and utility services following a person's death. Some families have found themselves in the position of having to hire IT experts simply to hack into the deceased's online accounts in order to discover passwords, usernames, and online assets.

Fortunately, there are relatively simple steps that you can take in order to avoid these pitfalls with respect to digital assets. There are some specialized websites, such as Legacylocker.com, that allow you to authorize the release of online account information to people following your death. You also can save all pertinent online information to a flash drive, including a list of online accounts and an updated list of usernames and passwords, and store the flash drive in a secure location such as a safe or a safety deposit box held jointly with your spouse or another heir.

When you are engaging in estate planning, whether it be with respect to tangible or digital assets, you must proceed carefully and with the advice of an experienced DuPage County estate planning attorney. With the help of a qualified legal estate planner, you will be able to rest assured that your property - both actual and virtual - is properly secured for your family's usage in the future.

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