Jeff Deiss, CFP®, AEP, Wealth Advisor
by Jeff Deiss, CFP®, AEP, Wealth Advisor

CFP®, AEP, Wealth Advisor

Many of you have made plans for who will eventually inherit your house and your investments, which is great.  If you have or even if you haven’t, then sharing your estate planning goals is always a useful conversation to have with your wealth advisor.

Over time and, having been accelerated as a result of the COIVD-19 pandemic, more of us are living more of our lives online.  In addition to email and social media accounts, it’s become the norm to store financial records on smartphones, computers, or the cloud and to conduct financial transactions electronically.


As a result, accounting for our digital assets should be part of the execution and preparation of our estate plans.  If not, then your heirs may not be able to access them (family photos may be lost forever, social media accounts could stay open online long after you’ve passed, and your heirs may not receive all of the money that you’d like to leave to them).

Digital assets can be passed on to designated parties like other kinds of property.  But gaining access to them can present challenges for anyone other than the original owner.  Passwords are the first obstacle (your family members can’t access your phone or computer or online accounts without them) and there are criminal and data privacy laws to understand as well.

At the state and federal level, there are laws that prohibit unauthorized access to your devices and private personal data.  These protect consumers against fraud and identify theft, but they can also prevent family members from gaining access to the digital assets of a deceased loved one.  For this reason, make sure that your estate plan authorizes your fiduciaries/beneficiaries/heirs to access your digital data.

Data privacy laws prohibit online account service providers from disclosing the electronic communications of the owner of that data without the owner’s consent.  Fighting it out after-the-fact with Apple, Facebook, Verizon or Google is not a court case your heirs are likely to win.  What you need to do now is understand the “terms of service’ for your email and social media accounts and, like the rest of your estate planning, take steps to prepare in advance.

First, make a list of your digital assets, including user names and passwords and make sure that your trusted family members know how to find/access it.

Second, back up any data you’ve stored in the cloud.  This means saving it on a local computer or storage device (like a portable/removable hard drive).  This not only includes your photos, but also important documents such as account statements, birth certificates, wills, tax returns and insurance policies.  Check your social media accounts too.  Facebook, for example, has a One-Click Download option to download all of your data to a computer and, while not financially valuable, that information may be really valuable to your heirs for other reasons.

Third, provide consent in your legal documents.  You may need to update your will and power of attorney if they are old and you didn’t consider this issue the last time you executed them.  And make sure that they you grant your fiduciaries with the ability to reset or recover your passwords as needed (time may have passed between the last time you logged in and they eventually do).  Also, you may not want to make all of your digital assets accessible to all of your fiduciaries so this is where you can designate exactly who can see what.

Fourth, communicate your plans.  If you’ve read our comments on essential estate planning documents over the years and kept up, then that’s great, but can your designated power-of-attorney/agent/surrogate log into all of your accounts if something were to happen to you?  The bills will still need to paid.  It kind of defeats the point of having all of your documents prepared and skipping this part of the planning.  If you care about making life easier for your family at a time when it really matters, then take 5-10 minutes to have a conversation and make sure that they know where to find everything and how to get logged in.

As more of us live more of our lives online, the issue of planning for our digital assets (including digital currencies and NFTs) will become more routine.  And the laws governing access to digital assets, for planning purposes, will evolve as well.  That may mean that your estate plan will need to be updated again in the future.  For now, taking the steps above may provide you with some comfort and make life easier for your heirs when the time comes.

If you have any questions, then as always, please reach out to your ACM Wealth Advisor.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.