You May Live Forever!
Estate planning is complex. To complicate matters, few people like to talk about their mortality, but it's necessary. Creating a will or trust is paramount to ensuring your family honors your wishes, and a well-structured plan can potentially avoid conflicts between heirs. Most people account for physical items like furniture, art, homes, cars, etc., but what about digital assets or social media accounts? If your beneficiaries can't access your Instagram account, your persona may live forever. If they don't know your Bitcoin wallet password, it may be gone for good, so it's imperative to include these items in your estate plan.
Keeping track of assets is challenging, especially when stored in the cloud. One way to ensure your social media accounts and digital assets are accessible to your heirs after you're gone is to give them the passwords. If they can access your accounts, they can close them out or transfer the assets into their names. Of course, managing passwords is an art, so a program like 1password (https://1password.com/) can eliminate or reduce the frustration of trying to figure out how to access your information. It also beats sorting through a box of sticky notes or trying to read your handwriting on a legal pad. Is it a letter or a number?
What if your heirs aren't familiar with your social media accounts? Can they close them, or will you live forever? Thankfully, your heirs have options. They can contact the media platform and give them your name, a link to your profile, identification documents, death certificate, and proof of relationship. Once done, they can close your accounts. Another option through Instagram and Facebook is to memorialize your account. If memorialized, it will include a remembrance badge and be frozen, so no more updates are allowed. Snapchat and Twitter will only deactivate the account.
If you think ahead, you can assign a legacy contact to your media sites so they can assume your account once you're gone.
What if you're an influencer, or your site generates money through YouTube or TikTok? In this case, you can assign someone to take over your account, so the revenue stream continues.
Bitcoin and cryptocurrency are different because it's decentralized and not issued by banks or custodians, and there is no help desk to call after you die. If your heirs can't access your wallet, your assets are gone forever. Poof. To avoid this problem, let your beneficiaries know your passwords or store them on an exchange like Coinbase, Crypto.com, or FTX. Cryptocurrencies can transfer by will or trust.
PayPal and Venmo are excellent services, but if you don't let others know about these accounts, the money will be lost forever, similar to Bitcoin. To avoid this issue, log in to your phone to access the app, and reset the password if you know it. After accessing the app, you can transfer the funds.
If you're like most people, your life is on your iPhone – apps, wallets, passwords, contacts, etc. Your heirs can avoid several issues if they can access your iPhone. However, if they can't access your phone, they need to contact Apple and request access. Apple will need a certified death certificate, proof of executorship, identification, and a court order.
In addition to Aunt Mary's doll collection, Uncle Joe's books, and your brother's baseball cards, don't forget to include digital assets and social media sites in their estate plan.
Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn't as hard as you might think. ~ Suze Orman
June 6, 2022
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management, located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren't suitable for every investor.
Research Assistant = Ryan Arnold