Financial by Deirdre McGuire , Wealth Advisor May 24, 2022
We now live a significant portion of our lives online. According to Pew Research Center, 85% of Americans own a smartphone, and 75% own a desktop or laptop. Inevitably, by spending time on the Internet, anyone who uses email, has a password protected cell phone, makes online purchases, or pays bills online has accumulated digital assets and property.
As with your offline, real-world assets, it is wise to keep your digital assets in order by identifying them, tracking them, and arranging for their transfer after you pass away. Taking charge of your digital legacy is another way to ensure your financial life and cherished possessions are organized and secure.
What Are Digital Assets?
Digital assets are the artifacts created by your computer and smartphone activity. Technology consulting firm Gartner defines the term as follows:
A digital asset is anything that is stored digitally and is uniquely identifiable that organizations can use to realize value. Examples of digital assets include documents, audio, videos, logos, slide presentations, spreadsheets, and websites.
Where To Start
As your digital footprint grows, reviewing your digital assets may seem like a daunting task. Nonetheless, there are some simple steps you can take to tidy up and protect your digital life.
Your digital assets may include:
Hardware such as computers, flash drives, smartphones, e-readers, or digital cameras
File storage and master password program, such as KeePass or LastPass
Cloud storage or backups such as Dropbox, iCloud, Box, or Google Drive
Online financial services, such as bank accounts, automated bill pay, digital wallets, Venmo, or retirement accounts
Social media accounts
Photos and videos
Paid online newspaper and magazine subscriptions
Streaming video and music subscriptions, such as Netflix, Hulu, Apple TV, or Spotify
Loyalty/reward programs, such as airline miles, hotel, or credit card points
Utilities, such as cable, phone, gas, or electricity
Insurance, such as homeowners, car, health, life, or renters
Health-related services, such as medical records or provider portals
Pet ID chips
Your Digital Inventory
The more technologically connected you are, the more items you will have to manage. Make a list of where your most important information lives, especially digital photos, videos, and documents.
Store this inventory in a secure location that is accessible only to you and your trusted successor in an emergency. There are several tools you can use to create and store your list, whether it is an Excel spreadsheet or a phone app like LastPass. You can also create your inventory the traditional way, on paper. What matters is to find a storage tool with which you are comfortable and use it.
However you choose to store your digital life, please make sure the people who need to know can access it such as have a key to the locked cabinet, code to the safe, or password to online storage. The goal is to have your digital property organized and protected.
Protecting Your Assets
Once you have an inventory of your assets, there are additional measures you can take to protect them, especially should you become unavailable to do so yourself.
Review your passwords and plan to pass them on. It is not enough to list your digital assets. You also need to have a list of each asset’s username, password/pin number, security questions, and any email address associated with it. Make sure to use a different ID and password combination for each of your financial accounts. Make each password unique, long, and strong. As with the rest of your digital asset inventory, it is imperative that you keep this information secure, share it only with individuals you trust, and decide who should have access if you become incapacitated or pass away.
Talk to your attorney. Depending on which state you live in, you may be able to formalize your digital estate plan. If you do not want some (or any) of your devices or online accounts to be transferred after you die, you should spell it out.
Make decisions about your digital assets. Some assets will have monetary value, such as a PayPal account. Others will have sentimental value, like your family photos. But each asset requires a plan for its disposition. You may want some transferred to family members or friends, or you may want your different accounts shut down.
Add an emergency contact. Both Android and Apple smartphone users can add emergency information – both medical information and names of emergency contacts – by searching “Emergency” in Settings. Android devices let you add a custom message to your lock screen such as “If you have found this phone call x at x number.” iPhone users can go to the Health app and choose “Medical ID.” Here, you can list any medical conditions and medication information, as well as emergency contacts.
Add a legacy contact. Choose someone to look after your account after you pass away. If you are an iPhone user, you can also add a legacy contact. A legacy contact is someone who can access your Apple account and its information when you die. To designate a trusted individual as your legacy contact, ensure your phone’s operating system is upgraded to iOS 15.2. Then go to “Settings,” click your name, select “Password and Security,” and find “Legacy Contact.”
Use Google’s Inactive Account Manager. You can decide when Google should consider your account inactive. Go to your Google account, select “Data and Privacy,” and scroll down to the bottom to “Make a plan for your digital legacy.” You can choose when Google should consider your account inactive. We suggest you choose at least 6 months of inactivity. You can also choose to notify somebody such as a trusted friend or family member.
Designate your Facebook profile. Currently, Facebook is the only major social platform that has an option to add a legacy contact. This person will be able to make a decision about your account after it is memorialized. Go to “Settings and Privacy,” then click “Settings.” If you’re on a desktop computer, you should see a column on the left and a main screen with a header “General Profile Settings.” On this main screen, you should see an option labeled “Memorialization Settings.” Click it, type in a Facebook friend’s name, and click “Add.” On a phone, after “Settings,” tap “Personal Information,” then “Manage Account,” then “Legacy Contact.” Follow the on-screen instructions to choose a Facebook friend as your legacy contact.
So much of your life is a digital life. Creating a digital estate plan by making an inventory of your digital life and planning for disposition of your digital assets will help you stay organized and help bring you peace of mind.