What is Legacy Planning ?

Your important digital assets make for your digital legacy. That means, whatever information you have online that has sentimental or monetary value that you would like family or other people of interest to have easy access to if you were unavailable.

Some digital assets are intrinsic and contain value by their very existence. Digital songs you may have purchased are examples of intrinsic digital assets. Other digital assets, such as your personal photographs, your wishes if something happened to you have an emotional value unless they require management of tangible assets at which point they become even more valuable.

How do we calculate the value of what they are worth?

There are two answers to this question and both need to be evaluated to approximate the true value of your digital assets.

The first question to ask is “What would these be worth to someone else?”. It probably won’t surprise you that the IRS has some guidelines on this. The U.S. Treasury Regulation § 20.231-1(b) states that the value of your property is “The price at which the property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or to sell and both having reasonable knowledge of relevant facts”.  The value of your intrinsic digital assets is therefore whatever someone else is willing to pay for them. You may not know for sure what that number is, but you can probably come up with a pretty close guess…which is good enough for estimating your digital worth.Essential Things To Know About Cyber Security Insurance

The other question you need to ask is “What would I pay to get this back?”. This is probably the more salient question because it covers both the intrinsic and the emotional value of your digital assets. If your computer hard drive crashed and took everything with it, what would you pay to recover your data? You may have 1000 songs that you paid $0.99 each for ($990), but would you pay that to get them all back? Probably not. There are probably songs in there that you don’t care about any more. Contrasting that, those pictures of your children when they were young are priceless to you and there is no way to ever replicate them once they are gone. You might be willing to pay thousands of dollars for those even though they have no intrinsic value. What would you pay to be able to access your bank accounts, IRA, 401K, etcetera? Maybe the more important question is not what would you pay to get these back, but what would you pay to keep from losing these or to keep these from falling into the wrong hands? This is the value that you should assign to each of your assets. In 2011 the security company MacAfee did research on the value of personal digital assets. Adjusting for inflation, in 2014 an average American’s digital assets are worth approximately $60,000!

How can the LegacyArmour life monitoring platform help? 

LegacyArmour is providing the following checklist to guide you in locating all your digital assets. When you are done, we have provided you with vaults that allow you to upload these assets securely and only made available for access to your designated recipients based on a delivery trigger you choose, be it date, death or incapacitation. We ask that you update your digital assets within the LegacyArmour vaults frequently as life changes.

 When thinking about your digital legacy consider the following digital asset categories:

  1. Your estate documents (Wills, Trust health directive, etc.)
  2. Access to financial accounts or utilities.
  3. Family photos, or other files that you store online
  4. Your Business-critical documents
  5. Social networks, such as Facebook, Twitter, or LinkedIn & presence in online communities
  6. Email Accounts, blogs and licensed domain names

1. Your Estate Documents

a. Last Will – Complete this form to detail in writing your wishes regarding who is to receive your property at death and who will administer your estate. It also enables you to appoint trustees or guardians, if applicable.

b. Designated Caregiver Agreement – Statutory Form – This Designated Caregiver Agreement is a form which names an adult to serve as a designated caregiver to care for the parent’s minor child for a period specified in the designated caregiver agreement, but not to exceed one year. It becomes effective when custodial parents are unable to care for the child because of an emergency or temporary period of incapacitation.

c. Health Care Directive as Living Will – This is a statutory form, that is it provided for in the Minnesota Statutes. It allows you to appoint a health care agent to carry out your desires should you become unable to make important health care decisions for yourself and to make those specific health care instructions.

d. Statutory General Power of Attorney with Durable Provision – This Power of Attorney is a statutory form which means it has been approved by the state legislature. It provides for the appointment of an attorney-in-fact for various matters, including property, finances, real estate, business, banking, litigation and many more options.

LegacyArmour offer discounted access to personal Estate Planning Packages depending on the state you reside at.

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2. Financial Accounts and Utilities

Your executor will be forever grateful if you leave him or her clear instructions about how to access your financial accounts and utilities online. Use your will or trust to leave the contents of your financial accounts to your loved ones. But during probate, your executor will need access to these accounts to pay bills and wrap up your estate.

Consider whether you need to leave instructions about how to access the online accounts for your

  • checking or savings accounts
  • retirement accounts
  • mortgage
  • life insurance
  • cryptocurrency wallets access codes and private keys
  • tax preparation service.

3. Family Photos, Music, and Other Files

If you store music, photos, movies, or other digital files online, you have two things to consider – how your executor will access the files, and what you want done with the files after they’ve been accessed.

If you do not leave access to your online storage account, eventually, the account will be disabled and no one will be able to access the files. If you want to make sure that the files eventually get to your loved ones, leave instructions for how to access these accounts with your executor (see below).

If you own the contents of the files – for example, photos you have taken, or music that you have paid for – you can use your will or living trust to leave these items to your friends or love ones. Just describe them well (“all of my photographs of the Grand Canyon stored in my Snapfish account”) and make sure that your executor has the information he or she needs to access the account and download the files.

4. Your Business-Critical Documents

a. Business Will

At the very least, every business succession and personal estate plan should include a will. This document allows the owner to specify how their assets would be transferred, and to whom, after they die. Wills also identify an executor who carry out the will owner’s instructions and manage the transition of the business.

An important inclusion in the LegacyArmour digital vault is a list of all online bank accounts, email accounts, file sharing sites, social networking sites, and their corresponding passwords. If the business owner is the only person running the business, this important information needs to be immediately accessible to the owner’s heirs to prevent any damage to the company. In some states, not even family members or appointed executors can access these accounts if they don’t already have the information.Protecting Your Business Against Cyber Attacks In 2018

b. Trusts

Like a will, a trust allows businesses to control what happens to their business-critical assets if one of the owners die.  Trusts have several advantages over a will. Any items placed in the trust will bypass any probate processes. This makes assets owned by the trust more easily and quickly transferrable to heirs, and since it doesn’t go through probate, the details are kept private. Depending on the kind of trust, it could also reduce both legal fees and estate taxes. With a revocable or living trust, the terms and assets can be easily changed if any decisions change.

c. Power of Attorney

Every business with one or more employees has payroll obligations. The owners should consider creating a general power of attorney document, which names an individual who can carry out business affairs if the owner becomes incapacitated. If a power of attorney is not in place, and something happens to the owner, the courts will appoint someone to handle their affairs. Why would anyone leave this to a chance?

d. Buy-Sell Agreement

“If a business has multiple owners, a buy-sell agreement is a must. This contract establishes an agreed upon plan for the business’s future should one owner die or become incapacitated”, says financial planner Paul Pagano, who specializes in advising business owners. The agreement defines a sale price for the business and each share, and allows each owner to document whether they want their partners to buy out their share, whether they want to block certain people from stepping into the business, or if they would prefer family members to sell their portion. Since the price has already been determined, the family will have peace of mind that they are receiving a fair price.

Without one, the business owner’s beneficiaries may be stuck running a business they have no interest in, don’t want, and can’t sell—and their partners may end up with a partner they never anticipated and don’t wish to work with. For these reasons, Pagano recommends drafting the agreement as soon as the business has value and cash flow is positive.

e. Insurance

To raise the funds necessary to buy out a deceased partner’s share under a buy-sell agreement, the living partners often need life insurance. The easiest way to do this is for each partner to purchase a term life insurance policy and name the other partners as beneficiaries. One can even set up an irrevocable life insurance trust to avoid having the insurance proceeds count as part of their taxable estate. This will ensure that surviving owners receive tax-free capital to purchase the other’s portion of the business from the estate. “This does not have to come out of your pocket. It is a business expense and you should have the business pay those insurance premiums,” says Pagano.

Whether one co-owns the businesses or is the sole owner, he/she should also buy a separate term life insurance policy that names their spouse and children as beneficiaries. This will give the owner’s family time to adjust to life without their income and avoid financial hardship. This is critical since a buy-sell agreement can take time to complete. Insurance will provide funds if there aren’t other sizable resources.

f. Succession Plan

If the business owner is a sole proprietor, they will need a clear plan for what should happen to the businesses when they die. If they want to pass on the business, they need to begin delegating and preparing a successor. If they’d prefer that the business be sold, they can help their heirs by doing research ahead of time that will make selling easy and inexpensive.

To prevent disagreements and ensure that things happen as they want them to, most financial planners recommend creating a document that outlines their wishes for the business’s future. This document should clearly lay out important information about what the business owns and owes, and include a detailed list of accounts and passwords.

5. Facebook and other Social Networks

If you belong to an online social network – such as Facebook, Twitter, LinkedIn, or Pinterest, you may wonder what will happen to your account when you die. The answer is that it depends. Each company has its own policy on what to do with the accounts of deceased members. Some (such as Facebook), will put the account into “memorial” status, so that the account can still be viewed and memorial messages may be left for the deceased person. Other companies will delete or deactivate the account.  However, in most cases, if no one tells the company about the death, it won’t know – at least for a while. This gives you a window to have someone make changes to your account after your death. For example, you could have your executor post a final status update or tweet after your death. Or you could request to have certain things deleted from your account. Or you could ask your executor to delete the account altogether.

6. Email Accounts, Blogs and Licenses Domain Names

Most of your online accounts will not pass through your will or other estate planning device because they are not your property. Social network accounts, domain name registrations, email accounts, and most other types of online accounts are “yours” by license only. When you die, the contract is over and the business that administers the account controls what happens to it.

However, you can still affect the fate of these  accounts to some degree: You can leave instructions to those who will be wrapping up your estate describing your wishes. That way, although you can’t legally transfer your “ownership” of these accounts, you can still plan for what should happen to them after you die. Here are examples of popular online accounts and instructions that you might want to leave about them.Ways To Safeguard Your Legacy By Protecting Online Assets

Like social networks, what happens to your email accounts depends on the policy of the company who administers your account – for example, Yahoo, Google (Gmail), Microsoft (Hotmail), or for your work email, your employer. At some point after your death – the timing depends on the company’s policy — your account will be deleted. However, you could instruct your executor to send, delete, print, or archive emails before the account expires.

For example, maybe there is an email from your child, that you think your grandchild would enjoy reading. Or maybe there are certain emails that would be better deleted all together.

Also, if you write a blog, you may want to ask your executor to let your readers know about your death, to take the blog down, or to archive its contents.

Leaving Instructions for Your Digital Legacy

In summary, one should always think about making their wishes known to loved ones or people that should have access to information if they were not around. Leave instructions for your executors or beneficiaries about what to do with your information to for the peace of mind knowing they are protected. Loved ones often struggle to find that information at an emotional time and the more one can do to spare them the leg work the better. LegacyArmour can help you do just that!

In addition, LegacyArmour allows you to enter a personalized message for each future recipient of your information. That way, they have a personalized instruction to support what you had already included in your other estate planning documents. We want you to secure your legacy and want to equip you with the tools to do it easily and securely. Get started today!

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