Securing Your Client’s Digital Estate: What You Need To Know

Securing Your Client’s Digital Estate: What You Need To Know

This is a guest blog written by Brian O’Connell, Pennsylvania-based freelance writer with 15 years experience covering business news and trends, particularly in the finance and investments, real estate and Internet and technology sectors. You can read more of O’Connell’s work on his freelance web site.


The conventional wisdom on estate planning is that it covers the necessities – a will, invested assets, charitable gifts and one’s home and possessions.

In other words, whatever your client owns or has rights to after he or she is deceased.

But that’s the trouble with conventional thinking – it doesn’t allow for the dynamic, alternative paths that one’s money takes through the course of a well-lived life.

Take the case of online assets – what estate planning experts refer to as part of your “digital estate”.

digital estate planning

Essentially, the term digital estate is defined as those intangible assets (as opposed to tangible assets like a home, a stock portfolio or a bank account) built online that live on after your client is gone.

Consider these examples of a digital estate:

  • Tablet computers, laptop computers, desktop computers, flash drives, smart phones and all their contents
  • Web sites, blogs, Facebook accounts, Twitter accounts and e-mail accounts
  • Assets gathered in online payment systems like PayPal, commodities stored online on eBay or another web auction site.
  • Images and photos on Flickr, personal documents in Google Docs and videos on YouTube and subscriptions to paid online sites (like The Wall Street Journal or The New York Times.)
  • Online bank and other money management accounts, Internet-based medical data
  • Online shopping accounts that include credit card data and gaming sites (like poker and fantasy football) that have stored points toward financial reimbursement.

The complexities of estate planning, both online and off, is a big reason why 72% of Americans say they don’t have a comprehensive estate plan, according to a recent study by U.S. Trust.

how to leverage digital estate planning

By and large, your clients aren’t likely aware of the digital asset base they’ve built online.

As a financial advisor, it’s your job – and in the best financial interest of your firm – to leverage digital estate planning and position yourself as an expert in the field.

Do all that by using these tips to secure any online assets left – or that will be left – by a client’s so-called “digital footprint”:

Get an inventory: Financial advisors should encourage their clients, especially their older ones, to make a list of their online assets.

Download a Digital Estate Organizer for your clients here.

That should include any bank accounts, brokerage accounts, insurance accounts, mutual fund and other investment accounts. In addition, any accounts that hold credit card information.

Clients should include any “download destination “online accounts, such as PayPal, eBay, NetFlix or Amazon, that hold any financial accounts, including bank, credit card accounts and rewards or discount accounts.

Any assets in gaming accounts, like online gambling or fantasy sports, should be included as well.

Collect passwords: Also have your client record and safely store all of his or her online account passwords for easy access after they’re gone.

Offer to keep a copy in your office safe to ensure easy access to their accounts later on.

Or, opt for online digital asset storage sites like SecureSafe or LegacyLocker, which charge as low as $12 per month to safely store online client data, like passwords and email accounts.

Establish an online executor: Advisors should ask their clients to establish a digital executor – an individual close to the client (or a trusted professional source, like you, the advisor or a family lawyer) to have access to the client’s digital accounts.

There’s no legal mandate for an a digital executor, but doing so can make the estate planning process go more smoothly for your client – and for you.

Access useful online tools: Financial advisors can make the digital estate process look easier by using online tools that organize an online consumer’s digital footprint.

Try Google’s Inactive Account Manager, which can organize all of your client’s online assets on Google, and make it all available in one place – when you and your client need you to have it.

Generate written instructions: Once you’ve accumulated all of the passwords, email accounts and online assets, work with your client to produce a document that explicitly details what to do with his or her digital assets.

A simple will covers the financial accounts listed online, but a digital estate document allows your client to dictate what happens to other assets and possessions gathered online in a safe, secure and thorough manner.

It’s also a good idea to take a look at the state-by-state laws and statutes on digital assets.

In an era when 63% of online users don’t know what happens to their digital assets when they pass away (according to a 2012 study from Rocket Lawyer), financial advisors can really take their practices to the next level by leveraging digital estate planning services.

Follow the five tips listed above and get a leg up on your competitors still stuck in an offline world.

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