Advisor Resources: Practice Management

Digital legacy: An overlooked planning essential

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When it comes to her holistic approach, Amy Dietz-Graham, Portfolio Manager & Investment Advisor, The Durkin-Dietz Group, BMO Nesbitt Burns, incorporates an often overlooked and undervalued aspect of estate planning into wealth management discussions – digital legacy. Given the exponential growth of online accounts and assets, helping clients assess and appraise is not only a way to add value, it’s rapidly becoming an essential consideration for everyone.

It all starts with a plan

What I’ve come to know over time is that discussing a digital legacy is a natural extension of what we all do best as advisors – planning. Particularly with newly onboarded clients, my team endeavors to set up separate meetings for each critical component of wealth management, allotting the time necessary to lay the groundwork for a sound financial plan. In terms of the future, we look beyond retirement goals to put all of the building blocks of estate planning in place.

After establishing that wills exist, we drill down to specifics at the estate meeting, not only to ensure that documents are up to date, but also to learn what aspects of family legacy keep our clients up at night. It’s within this context that we discuss their digital footprint – something people often overlook, and almost certainly undervalue.

Whether it’s of monetary or sentimental significance, my team urges clients to think about what they leave behind online, to whom, their directives, and the specifics of access, to avoid complicated and even litigious situations.

Overlooked and undervalued

It’s not uncommon to underestimate the scope of our digital footprint. In addition to the obvious – online investing and banking – there are those with PayPal funds and cryptocurrency. Some of our clients have amassed considerable sums with retail loyalty programs, collector cards and airline miles, acknowledging the monetary value when we probe. However, it’s the less “tangible” aspects of a digital estate that can be the most ambiguous and problematic for executors/data heirs. These include intellectual property, copyrights, family photos, multimedia, social media, and web domains; private accounts like text and email; and files stored on cloud services or hard drives.

While we have a great tool at our disposal to help clients create an at-a-glance blueprint of physical, financial, and digital “holdings” and associated professional contacts, every advisor can engage clients in a meaningful dialogue – and prompt them to create an inventory of usernames, passwords and the devices used to access assets. And when it comes to tying up loose ends in an increasingly paperless world, it’s also advisable to suggest the inclusion of whatever is now managed solely online, such as utilities, subscription services and ecommerce accounts.

An inventory thought starter

To engage your clients in a dialogue about their digital legacy, use this list to get the ball rolling, and encourage them to take stock of login credentials for online accounts, assets and media.

  • Password-protected devices (e.g., mobile phones, laptops, desktop computers, tablets, hard drives, digital cameras)
  • Password keeper/manager
  • Banking, investment and PayPal accounts
  • Cryptocurrency
  • Email, text, blogs, website domain names/registration
  • Loyalty programs (e.g., airline, grocery, department stores)
  • Payments (e.g., credit cards, utilities, loans, mortgage, taxes)
  • Ecommerce and retail stores
  • Social media accounts
  • Entertainment/multimedia
  • Cloud file and photo storage services
  • Warrantees
  • Subscriptions
  • Electronic statements and receipts
  • Contracts and software licenses
  • Creative writing or design files
  • Health and medical information

Where there’s a will…

Similar to traditional estate planning, executor instructions for digital assets and accounts should be well considered. For example, your clients may want:

  • to deactivate social media accounts versus memorialize them, where applicable (each provider has its own policies);
  • to restrict access to private texts and emails; and/or,
  • to bequeath photos, but not the computer containing the photos.

It’s familiar territory for advisors to be privy to family conflict when it comes to financial and estate planning, and the consideration of a digital legacy is no different, other than the format of what’s left behind. We’re starting to see disagreements about Facebook pages and creative writing, for example, which can be avoided by removing discretion from the equation. In fact, failure to do so can open executors/data heirs up to liability.

If these conversations seem beyond your digital acumen, keep in mind that it’s as customary as encouraging clients to be organized, think about their legacy, and not leave their wishes up to interpretation.

The best place to start

I recently went through the process of updating my own will and it was a good reminder of the client experience. In light of that, I suggest that empathy is the best place for all advisors to start. Think of your own estate and how you’d want it handled. The easy part is then asking the tactical questions: Do you have a will? Is it current? Have you considered online accounts and assets of monetary and sentimental value…and what you’d want distributed or deleted?

We get the wheels turning by introducing the subject as part of a bigger-picture conversation – one that’s aligned with my passion for client education. The next step is to bring in one of our estate planning specialists, and/or the client’s own legal counsel, to hash out the nitty-gritty and provide guidance, which is particularly necessary given the evolving nature of this new area of law.

Our role is to add value by thinking of the things our clients may have overlooked; bring ideas to the forefront as part of sound wealth management; and revisit the plan on a regular basis. That’s the one constant in a changing world – providing guidance that helps keep clients on track to realize their ultimate goals for wealth and family security.

 

This information is not intended to be legal advice or tax advice to any taxpayer and is not intended to be relied upon. BMO Wealth Management and its affiliates do not provide legal advice to clients. You should review your particular circumstances with your independent legal and tax advisors.
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