Most of the United States is currently under some form of “stay-at-home” order. We are all being asked to limit our travel to securing essential goods or services for at least the next few weeks. Prior to our current environment, many of us would have seen an extended period of time around the house as an opportunity to get caught-up or make progress on some long-stalled home improvements. The irony is that anyone, outside a few exceptional DIYers, who has ever tackled a significant number of home projects knows that it requires at least 3-4 trips to the hardware store before you make any progress. Limiting travel makes what seems like an opportunity into a point of frustration. In addition, choosing to stay home and being required to feel very different psychologically.

Many people are left really wanting to be productive during this stay-at-home period but unsure how much can really be accomplished. We’ve decided to put together a series of financial guides that can be done at home to get your financial house in order. Over the next few weeks, we will tackle often forgot subjects like digital estate planning, calculating important financial ratios, and creating a savings priority list. None of these will require any travel or supplies and can be done at 10:00 a.m. just as easily as 11:00 p.m. First up, managing your digital assets.

Managing your Digital Assets

What are digit assets? They are any kind of data stored electronically that you have the rights to. Common forms of digital assets are photographs, logos, artwork (like drawings, illustrations, or audiovisual media), spreadsheets, word documents, emails, and even your social media presence. For the overwhelming majority of us these hold significant emotional and sentimental value, but little economic value. Still, we need to have a plan for them. We recommend an organizational plan for when we are alive, and a transitional plan for after we pass away.

Organizational Plan

The organizational plan is just what it sounds like. Find a way to catalog and aggregate important digital assets in one place. The most popular choices are on an external back-up computer drive, in the cloud, or on a personal computer. The cloud provides the most physical protection because it won’t be affected by floods, fires, or a spilled cup of coffee. The counter is you also have the least control over it because if the cloud service you used went down you would have little recourse. Fortunately, that is an extremely unlikely scenario, which can be further protected by using shared files that stores them locally on your computer AND a copy in the cloud.

How you organize them is less right/wrong than picking a system that fits how you use them. Generally, bucketing digit items of the same type together works well. Pictures with pictures, videos with videos, etc. Within those confines a date first approach may make sense. For example, if you frequently take pictures having a folder structure that categorizes them by year, and then a folder for each month within the year can be useful. If you want to find those Halloween pictures from 2017, no problem. If you have files going back a long way remembering the year and month can be hard. Also, you may not record things digitally often, apart from special events. That is where event folders are useful (i.e. Hawaii 2012 or Joe and Susie’s Wedding 2005). Finally, if you have a large number of physical pictures don’t worry. There are many remotely operated businesses who will digitize them for you, or you might even be surprised at how good they still look when scanned in yourself. However, you decide to catalog them, make it a system that is clear to more than just you.

The final organizational step is to record where everything is now stored and how to access it. This includes the services used like Google Photos, iCloud, or the name of your external hard drive. You can put it into a spreadsheet complete with links to the sites or write it down and keep it with other important papers.

Transitional Plan

What happens to your Facebook page when you pass away? What do you WANT to happen to your Facebook page when you pass away? This is one of dozens of questions you should spell out to help your executor manage your digital estate when you pass away. First, we’ll discuss the mechanics of setting it up and then we’ll help uncover what should be included.

To be clear, a true digital estate plan needs to be formalized in your will by an attorney. Just recording it separately and leaving it with family doesn’t have the same power, but if you only want to be helpful from an organizational standpoint, without personal preferences, a detailed listing may do. We’ll explore what needs listed next, but make sure that what is on it is easy to edit and find. That means if you prefer a hard paper copy you should still keep a digital one handy for easy editing and reprinting. Your transitional plan must describe where everything is kept, but just as important, include the passwords to obtain access. Finally, if you believe the executor wouldn’t be comfortable navigating various online portals and sites, make sure to name a friend or family member who can assist.

The shear number and types of digital information an executor will need today is remarkable. Many of our lives have slowly transitioned online, or perhaps began there for younger generations. Pictures, personal connections, online bill paying, shopping, and entertainment can all be found online now. Here is a list of major categories that you might want to account for in your digital transition plan:

  • Electronic devices (passwords for computers, laptops, and smartphones)
  • Financial accounts (investment, banking, credit card, PayPal, Venmo, social security, mortgage/loans, 529, & retirement plans)
  • Insurance coverage (life insurance, disability insurance, home, auto, workplace benefits page etc.)
  • Email accounts (both personal and work if allowed by your employer)
  • Social Media (Facebook, twitter, LinkedIn, Snapchat, Instagram, etc.)
  • Photography and music (iTunes, Shutterfly, Google Photos, iCloud, Snapfish, Amazon music, YouTube etc.)
  • Document storage (Google Drive, Dropbox, iCloud)
  • Digital subscriptions (magazines, newspapers, newsletters, Spotify or any other paid online content)
  • Auto-Bill Pay (utilities, cell phone, daycare, or any other bills you pay via auto-deduction not already listed)
  • Shopping sites (Amazon, Target, or any retailer, especially if you store your payment information with them)
  • Organizations (Clubs, charitable groups, professional organizations)
  • Digital currency or wallets (Coinbase like exchanges or info on storage method)
  • Reward sites (airline miles, hotel points, and other reward/loyalty programs that hold value)

Over time you may find additional sites, companies, or services you interact with online that you should include on your list. The important thing is if someone needed to temporarily take over for you in the case of a disability, or permanently manage your online presence due to a death, do they have enough information to do it. Surprisingly this would be challenging even for spouses as we tend to compartmentalize roles and responsibilities. We often forget how much is stored in 0s and 1s instead of our collective memory.

Steps to Manage your Digital Assets

  1. Think about and write down who should be responsible for your digital assets and managing your social media identities.
  2. Create a list all the sites, usernames, and passwords that would be needed if something happened to you.
  3. Decide how you want to store the information (in the cloud, physical hard drive, or both).
  4. Let the person, or persons, who would be responsible know where to find the information.
  5. Contact an attorney to legally include the language and your wishes into your will, if you so choose.

The first step is always the hardest part with these things so if you would like a copy of a sample digital asset log, please email us and we can send you one to help you get started. If we focus on controlling what we can control, we might surprise ourselves at the progress we can make, even in times like these.