Estate planning is an important part of any financial strategy. It’s a broad term that covers a lot of issues, but estate planning generally refers to the distribution of one’s assets after death. An estate plan may include a will, trust and other documents that state how your property and other assets should be distributed to your heirs. In today’s digital age, though, estate planning isn’t just for financial assets. You may have virtual accounts and assets that also need planning and protection. For instance, your email may hold important or sensitive information. Your social media accounts may hold photos, videos or other assets with sentimental value. Perhaps you even have online investment accounts or income streams that will need management after your death. Unfortunately, there’s no standard legal process for managing these assets. While a will, trust and other tools are accepted as legal documents to manage financial assets, it’s unclear how these documents can be used with regard to digital accounts. This is a relatively new area of estate planning, so your strategy could evolve over time. However, there are a few basic steps you can take today to protect yourself and your digital footprint. Decide on your wishes for your digital assets. Before you take any action, it’s helpful to sit down and think about your wishes and objectives. Make a list of your important accounts, such as email, social media, photo and file storage, and more. Then consider what you would like to happen to those accounts after you pass away. Are there any compelling reasons why someone would need access to an account? For instance, do you do business through an email or online payment account? Would your family need access to that information? Also consider the sentimental value of your various accounts. Do you have pictures or other memories that you would like to share with your family after you’re gone? Finally, privacy is also a concern. If you give your family access to your email or social media after you pass away, consider that they may be able to see everything you have ever done in those accounts. There may be certain information or communications that you don’t want to share with your children or other loved ones. Learn about your digital vendors’ rules. Since there are no standard rules about posthumous digital management, each company has created its own rules and guidelines. Some email providers are strict and don’t allow any access after an account owner’s death. Others allow access if the account hasn’t been used in several months. Some social media companies will keep your page up as a “remembrance page” with limited access to others. Do some research to see how your primary account platforms operate after a user’s death. They may allow you to designate a backup person to take over your account or access certain information. If they don’t allow that option, you may need to consider alternative strategies. Create written instructions. Theoretically, you could include account management instructions, usernames and passwords in your will or other documents. That may not be a great idea, however, as those documents are often filed as public record. That means anyone could gain access to your accounts. Instead, consider using a password management tool to store login info, and then simply have your estate executor provide that info to the appropriate person. You could also store a document with digital asset instructions along with your other important documents, such as your insurance policy, will and others. Ready to review your estate planning strategy? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your objectives and all your assets, and then develop a plan. Let’s connect soon and start the conversation. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18086 – 2018/10/1
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Do you have an estate plan? While it may not be pleasant to think about your own death, estate planning is an important part of any financial strategy. Your estate plan provides guidance to your heirs and loved ones on what should happen to your assets, income and other important accounts after you pass away. Estate planning isn’t just for what happens after you pass away, though. You can also use it to address issues that may arise at the end of your life. Specifically, you may want to consider incapacitation, which is the inability to make or communicate your own decisions. It’s usually caused by Alzheimer’s or other cognitive issues, but it can also be caused by other ailments. Incapacitation is too important to ignore, especially if you’re nearing or entering retirement. Without an incapacitation plan, your family could face legal, financial and even personal challenges as your health deteriorates. You may have people making decisions on your behalf whose wishes don’t necessarily align with your own. Below are a few of the biggest consequences that can come from incapacitation if you don’t have a plan in place. Incapacitation may not be a likely scenario, but it is possible, especially if you’re entering retirement. Now may be the time to develop a strategy. Financial Issues The most obvious problem with incapacitation is that you’re not able to make important financial decisions. Even if you’re incapacitated, bills still have to be paid and your investments still need to be managed. Your spouse may be able to handle some of these responsibilities, but he or she could face complications with accounts that are only in your name. If you’re not married, the issue could be even more complex. A grown child or other family member may be responsible for your bills or other financial issues. They may have to work out payment plans with health care providers or make investment decisions on your behalf. They may even have to sell your home or other assets. Fortunately, there are steps you can take to retain control, even if you should become incapacitated. One step is to use joint account ownership when possible with your spouse or a trusted family member. At a minimum, keep your spouse informed about your various accounts, bills and income sources. You also could put certain assets in a living trust. You’d name yourself as trustee and another person as successor trustee. If you ever become incapacitated, your successor trustee takes over management of the trust assets. Legal Your incapacitation could also have legal ramifications. Some health insurers won’t pay for certain procedures without consent from the primary party. If you’re incapacitated, it’s tough to provide that consent. Your family may have to go to court to get a guardianship or power of attorney established on your behalf. That usually requires legal documents, court hearings and more. It can be especially complex if your family can’t agree on who should fill that role. Some advanced planning can eliminate the confusion. A power of attorney is a document that designates another individual as your decision-maker in the event you become incapacitated. That way you know who will be making decisions on your behalf, and you can communicate your wishes to that person. Personal The personal impact of incapacitation may be the most significant cost. Incapacitation is usually a traumatic time for a family. Your loved ones may be struggling with the emotions around the situation, along with the logistics, costs and more. It’s possible that your family members may not agree on the best course of treatment or how your finances should be managed. Multiple people may feel that they should be in charge. Because the issue is already emotional, it’s not difficult for these conflicts to become heated. Probably the last thing you want is for your loved ones to fight or argue because of your health issues. Incapacitation planning can minimize this risk and provide clear instructions to your loved ones. That way they can spend less time arguing about decisions and more time supporting you and one another. Ready to develop your incapacitation plan? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18086 – 2018/10/1 |
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