When it comes to monthly bill paying, chances are that many Americans utilize online bill payment services. Many banks offer an online banking option, allowing customers to pay bills and transfer funds between accounts — without every leaving a paper trail. In addition, many brokerage and life insurance companies also offer online statements. Even the federal government and many state governments allow tax returns to be e-filed.
What all of this means is that an outsider — or an heir — might be hard pressed to get an inventory of a decedent’s financial affairs without help. More than ever before, the process of locating assets and valuing an estate can be burdensome due to digital asset holdings.
Of course, there are other reasons for proactive estate planning. Without a will or other type of estate document, an estate might be subjected to probate and intestate succession laws, most likely at great time and expense. With the help of an attorney, an individual can utilize legal instruments to maximize potential tax savings and possibly avoid probate.
A recent article suggests that, at a minimum, every individual should inventory his or her digital accounts. That process should include a list of usernames and passwords. If an individual is uncomfortable with having that information out in the open, the listing might be put in a safe deposit box or left with an appointed fiduciary, such as an attorney. From there, an attorney can help clients articulate their estate planning goals and determine whether a trust or will might accomplish their plans.
Source: USA Today, “Estate Planning 101: Don’t forget digital assets,” Eric McWhinnie, May 25, 2014