It’s that time of year for New Year’s resolutions. Do You Have a Plan for Your Digital ‘Estate’?

Even people who think they've ticked off all of the usual boxes on their estate-planning to-do lists may have overlooked an increasingly important component of the process: ensuring the proper management and orderly transfer of their digital assets. Just as traditional estate-planning relates to the management and transfer of financial accounts and hard assets, digital estate-planning encompasses digital possessions, including data stored on tangible digital devices (computers and smartphones), data stored in the cloud, and online user accounts.

Digital estate planning is, in many respects, more complicated than traditional estate planning. The field of digital estate planning is evolving rapidly, as are digital providers' policies on what should happen to digital assets that are left behind. Digital assets are also governed by a complex web of rapidly evolving laws, both at the state and federal levels. Precisely because of all the potential complications, it’s important to take a few minutes and get a plan in order. Here are several key steps to take.

1) Conduct a Digital ‘Fire Drill.’ A good first step in the digital estate-planning process is to conduct a digital fire drill, which tends to jog your memory about what digital assets you deem important. Consider the following questions. What valuable items would you lose if your computer was lost or stolen today? If you were in an accident, would your loved ones be able to gain access to your valuable or significant digital information while you were incapacitated? If you were to die today, to what valuable or significant digital property would you like your loved ones to have access?

2) Take an Inventory of Your Assets. The next must-do is to create an inventory of the digital assets you named during the fire drill. Document the item/account name as well as usernames and passwords associated with that item. Among the items to document in your digital inventory are: digital devices such as computers and smartphones, data-storage devices or media, electronically stored data, including online financial records, whether stored in the cloud or on your device, user accounts, domain names, and intellectual property in electronic format. This document would be chock-full of sensitive information, so keeping it safe is crucial. A printed document should be stored in a safe or safe deposit box, and an electronic document should, of course, be password protected.

3) Back It Up. We've all been schooled on the importance of regularly backing up digital assets, and estate-planning considerations make it doubly important to do so. Even if a specific device malfunctions, storing digital assets on another storage device or in the cloud helps ensure the longevity of those assets. Moreover, online account service providers may voluntarily disclose the contents of electronic communications, but they're not compelled to do so. If you want to help ensure that your loved ones have access to the information in your online accounts, backing it up on your own device is a best practice.

4) Put Your Plan in Writing. Experts also recommend formalizing your digital estate plan. That means naming a digital executor—someone who can ensure that your digital assets are managed or disposed of in accordance with your wishes after you're gone. If your primary executor is savvy with technology, there's probably no need to name a separate digital executor. But if not, or if you have particularly valuable or special digital property, such as intellectual property, experts advise a separate fiduciary/executor for digital assets. Depending on the type of property, the fiduciary may also need special powers and authorizations to deal with specific assets. This is for information purposes only and should not be construed as legal, tax, or financial planning advice. Please consult a legal, tax, and/or financial professional for advice regarding your personal estate planning situation.

Mitch

Mitchell Bloom is President and founder of Bloom Financial, LLC. Bloom is a boutique financial planning firm. It specializes in transactional tax planning. It also focuses on retirement income planning, estate planning, and investment management. The company prides itself on its cornerstone, “Financial Advice in Plain English.” With over 36 years of helping 100’s of clients with retirement planning, Mitch has taught classes for some of the largest institutions in Colorado. Over the last three years, modernization of financial services technology has streamlined and simplified client financial planning facilitation. It has also expanded outreach capacity, planning options, and reporting capabilities. This new partnership best helps individuals and families with highly appreciated businesses, stock, crypto, art, CRE, and rental properties. It also serves highly compensated executives and business owners. The Bloom Financial/FourStar partnership increases clients’ reach in the ever-evolving world of financial planning breakthroughs, tactics, and tools. The firm consults industry economists in addition to different viewpoints of The Capital Market Assumptions 10-year Outlook. For example, the decade starting in 2024, assumptions for U.S. equities range from Vanguard’s 4.2%-6.2% to BNY Mellon’s 7.4%1, 2. These numbers are well below the market average. President, Mitchell Bloom said, “the standard 60/40 model portfolio may be facing a tough decade ahead. One of our goals is to improve clients’ chances of investment success using diversified alternative investments. We get excited teaching clients about our Core-Satellite investment philosophy commonly used by institutional investors and universities like Yale and Harvard. For clients who qualify, we tilt their Satellite portfolios towards alt funds. These invest in start-ups, angel investments, private equity, hedge funds, and real estate.” Bloom’s mission is to help clients become liberated from the stress and anxiety of understanding taxes, markets, retirement, and the transfer of wealth to the next generation. Over the last 36 years, Bloom has developed a nationwide team of trustees, tax attorneys, CPAs, business brokers, certified financial planners. They also work with insurance auditors, art appraisers, custodian banks, third party service providers, and investment advisory firms. FourStar Wealth Advisors is a Registered Investment Advisor firm headquartered in Chicago. FourStar Wealth is an independent firm without the conflicts or restrictions of the old school firms. We believe success in achieving financial goals starts with a comprehensive wealth strategy. We help you define what is most important to you and formulate the strategies suited for your needs This applies to whether you are accumulating wealth or investing for income, solidifying your retirement plan, or devising a distribution approach that meets your lifestyle and legacy goals. Bloom is a Registered Investment Advisor Representative with FourStar Wealth Advisors of Chicago and is partnered with Buckingham Strategic Partners for portfolio management, financial planning, and back-office support. Founded in strategic investing that is scientific, consistent, and above all, based on decades of research and innovation. Buckingham Strategic Partners Investment Committee has included noted academics Dr. Harry Markowitz, winner of the Nobel Prize in Economics in 1990, and Dr. Meir Statman, one of the pioneers in the field of behavioral finance. Passion and integrity are at the heart of the firm’s values, actions, and culture.