Do you have an estate plan in place? If not, you’re not alone: A recent survey revealed that two-thirds of Americans have not made a will, or prepared any kind of estate planning document.
Deciding what to do with your assets after your death can feel daunting, particularly when you consider the sheer volume of paperwork involved. However, digital wills are emerging as a modern solution. Ushering in a new era of efficiency and accessibility, the new generation of digital will platforms is transforming the traditional landscape of estate planning, and making it easy for individuals to plan for the future.
In this blog post, we’ll take a look at the benefits of digital wills and explore how they can simplify the estate planning process for you and your loved ones. We’ll also delve into the legal considerations, and see how digital wills fit into the broader evolution of estate planning.
It's crucial to differentiate between digital wills, online wills, and electronic wills as they serve different purposes and have varying levels of legal standing. A digital will operates as an online vault, holding vital documents, account details, and articulating your final wishes. It's a comprehensive tool, customized to cater to individual needs, and acts as a one-stop-shop for you and your loved ones to manage and protect your legacy.
On the other hand, an online will and an electronic will are legally binding documents. An online will is created, stored, and managed via an internet platform, while an electronic will is a document that you draft and sign digitally, with legal validity similar to a traditional paper will - though it's important to note that most jurisdictions do not accept electronic wills currently. While all three types of wills can overlap in certain aspects, their core functions and legal status differ significantly.
While a digital will is not the same thing as a last will and testament, it can certainly help you create one. In fact, a digital will can help simplify the entire process of organizing your estate by pulling all the essential information together in one place.
Estate planning encompasses a number of different tasks, including:
A digital will provides a user-friendly platform so that you can organize and manage all of these estate details effortlessly. It allows you to store vital financial records such as details of your bank and savings accounts. You can also give instructions regarding digital assets such as your social media accounts and any subscriptions, and store your passwords securely. Finally, a digital will can be used to record your final wishes regarding your funeral, charitable giving, and the care of your children or pets.
Digital wills ensure that vital information is easily accessible while maintaining the highest standards of confidentiality. Let’s take a look at the benefits of digital estate planning:
The beauty of a digital will is the accessibility it offers to both you and your estate’s administrators. When you’re making your last will and testament, you’ll have everything to hand, from life insurance policies to up-to-date lists of debts and assets so that you can make an informed decision about your gifts and bequests.
Having access to those same documents then helps to streamline the estate administration process for your executors further down the line. If you have ever acted as an administrator, you’ll know that information gathering is one of the biggest challenges. Being able to retrieve essential information such as bank account details at the touch of a button makes it easy to determine the value of the deceased’s estate quickly and accurately so that you can distribute the assets to beneficiaries in line with their wishes.
Intertwined with this accessibility is the high level of security that digital wills offer. Before the advent of digital tools, the only way to organize your affairs was on paper, with essential documents gathered together in a folder or filing cabinet. Clearly, this presents a security risk, with paper documents vulnerable to theft and unforeseen disasters, such as flood and fire.
Digital wills, however, offer a secure storage solution. The leading platforms use data encryption to keep your private information safe, and follow best practice protocols, such as multi-factor authentication and setting user permissions. Meanwhile, storing data on multiple servers in the cloud mitigates the risk of a disaster. All in all, it’s a great deal more secure than scribbling your passwords down on a piece of paper and locking them in a cupboard.
A secure storage solution is especially crucial when you consider the changing nature of estate assets. While modern estates still hold traditional assets such as share portfolios, jewelry, and real estate property, digital assets such as cryptocurrency or personal photo libraries are increasingly a part of the mix. A digital will is a secure way to give your chosen beneficiaries access to your accounts and to store your passwords safely.
Life doesn’t stand still, and organizing your estate isn’t necessarily a one-and-done task. The value of your estate can change over time, particularly if many of your assets are affected by market fluctuations. Your own circumstances might change, for example, if you retire earlier than planned, or receive an unexpected windfall. And the needs of your beneficiaries are constantly evolving too, as they complete their education or start families of their own.
As a result, it’s essential to keep an eye on your estate and to review it from time to time, making any necessary adjustments as they arise. Digital wills make this easy to do. You can log in at any time and make real-time updates to your estate plans, ensuring that everything reflects your current wishes—whether you’re looking to make an additional bequest to a favorite charity, or have simply changed your mind about how like to take care of your pet.
Making a digital will doesn’t have to be a solo activity. It’s also a great opportunity to engage family members and beneficiaries along the way, fostering collaboration and facilitating communication and collective decision-making during the estate planning process.
As you add documentation, assign tasks and consider bequests, you’ll likely find that the process prompts a number of conversations. Who is the best person to act as your executor, or look after your children? How can you best support your favorite charity? What does your executor need to know about canceling your subscriptions? Taking a transparent approach when you’re organizing your estate will help prevent any nasty surprises and beneficiary disputes during the probate process later on.
Unlike a last will and testament, which needs to be signed and witnessed, a digital will is not a legal document. However, it’s important to take legal considerations into account when using digital tools to help plan your estate.
In the first instance, check that your digital platform is a reputable provider, with all the appropriate security certifications in place to protect your personal and financial data. User reviews and recommendations can be helpful when it comes to finding the right platform.
Digital wills don't just represent a secure and accessible way to organize and store your final wishes; they also offer significant benefits for streamlining the estate administration process.
One of the most challenging and time-consuming aspects of estate administration is the discovery of the deceased's assets. Traditional means often involve sifting through piles of paperwork and conducting extensive research, which can take up a considerable amount of time and resources.
However, digital wills can alleviate this burden significantly. With an up-to-date and accurate inventory of your assets stored within your digital will, executors can bypass the tedious discovery phase. This accessibility not only speeds up the process but also ensures that no assets are overlooked during the administration process.
In today's digital age, many of our transactions and interactions occur online. From social media accounts to subscription services, these digital assets can pose a challenge for executors who need to close them upon the individual's passing. Without access to the deceased's inbox or knowledge about these accounts, executors may encounter obstacles in fulfilling their duties.
Digital wills can come to the rescue in this situation as well. By maintaining a comprehensive list of these accounts and their pertinent information, digital wills provide executors with the necessary tools to swiftly and efficiently manage the closure of these digital assets. Thus, reducing the complexity and stress often associated with this task.
Modern life is increasingly lived online, and digital solutions will continue to play a major role in estate planning and administration too. We can expect to see continual refinements of tools such as digital wills, driven by advances in technology. Artificial intelligence, for example, could analyze data to help individuals and families make informed choices.
Digital solutions point the way forward in the professional arena, too. Legal firms are increasingly embracing technology to streamline their practices while improving the service they can offer to clients. Estateably is one of the platforms leading the way, with features including document automation, accounting tools, and one-click reporting to create a one-stop estate administration solution for trust and estates professionals.
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