Today, and particularly in the wake of the COVID-19 pandemic, we are all living our lives digitally more than ever before. The average adult today now pays bills online, receives electronic statements and utilizes paperless billing. However, what happens if you are suddenly unable to check your bills and manage your finances? How will your loved ones or trustee manage your bills and know what bills you need to pay in the first place?
Estate Planning in 2020
One of the newer components of estate planning is planning around your digital assets and accounts. A good estate plan in 2020 should include ways to manage your assets online, like passwords and login information. If you do not include proper provisions in your estate plan, it can be very hard for people to gain access to your online financial information. There are no federal laws that regulate access to digital property yet, but Maryland does have a law in place.
The Maryland Fiduciary Access to Digital Assets Act
This act established a process for allowing your executor, trustee, power of attorney or court-appointed conservator access to online accounts after you are gone. The act can also give you the chance to restrict portions of your accounts after death and keep them off-limits. We suggest that your estate plans include provisions that name a fiduciary who can act on your behalf in managing your virtual accounts, profiles and assets.
Organizing Your Digital Accounts
A little bit of planning now can save you a lot of time and stress down the road.
- Inventory your online profiles and accounts and create a document with your login IDs or usernames and passwords. This information should be kept in a secure place and updated regularly as you change your most important passwords.
- Create a Secure Virtual Vault: Find one place where you can keep all of your passwords and login information, as well as other sensitive data. Numerous secure services for just this purpose are available online.
- Create Your Digital Asset Plan: Write out a statement of intent about who you want to grant access to which of your accounts.
- Select Your Advocate: Finally, you can select and name your trustee, executor or personal representative. Make sure that you choose someone you know will follow your wishes, including which accounts you want deleted and not accessed.
Estate Planning with Miles Tax Advisory
If you are ready to explore estate planning or plan to minimize your tax liability this year, we are always here to assist you!