When people think about getting their financial affairs in order, so they can pass wealth on to loved ones when the need arises, their ‘digital legacy’ may not be something that springs to mind.
New research indicates that many people could be overlooking their digital life when legacy planning. More than two-fifths (43 per cent) admit they have not shared all details of their financial accounts with someone they trust, according to wealth manager St James’s Place.
With people now undertaking more financial tasks online, meaning less of a paper trail, sharing details with a trusted person, who may need to access this information, can be important.
However, according to the survey findings, one in seven (14 per cent) who had not shared their information said they were planning on briefing someone but hadn’t got around to it yet.
And in a world where passwords constantly need to be refreshed, one in 10 say they change their passwords so frequently, that they feel it’s too much work keeping their legacy plans up to date.
In fact, two-fifths (39 per cent) of people rely on memory to keep on top of their passwords, the poll of 4000 people across the UK in August and September found.
Eddie Grant, director at St James’s Place, says the lack of a paper trail to help loved ones to search for accounts “can be especially problematic in the event of death or incapacitation”.
Mr Grant adds: “It is important that people consider their digital legacy as part of their financial planning to ensure that our loved ones have all the information that they may need.
“There can be lots to think about and it can be a difficult and uncomfortable topic, so it’s worth speaking to a financial adviser, who can guide you through the process of passing down your digital legacy in a safe way, at your own pace.”
How to safely pass down a digital legacy
Here are Mr Grant’s tips for safely passing down a digital legacy:
1. Ensure you have a will, and that it’s up to date. The purpose of a will is to discuss your wishes and give clear direction to your trusted executors and reduce any potential disputes.
2. Track down and keep all your financial documents. Tell your loved ones where they can find it, should they need to access this information.
3. Don’t be afraid of having difficult conversations. Together you can achieve much more, but families often avoid discussing finances. Have an open and honest conversation to express how you want your wealth to be shared in the event of your death or incapacitation.
4. Factor your digital finances into your legacy planning. In a paperless world, we are increasingly reliant on our digital life, from managing our finances to our social media presence. Ensure that a list of digital accounts, such as bank accounts and social media platforms are mentioned within legacy plans.
5. Consider power of attorney. This could give someone you trust the authority to make decisions on your behalf if you lose the mental capacity to do so yourself.
Have you made a plan about your finances? Did you consider your online interactions? Why not share your experience in the comments section below?
Also read: Too many boomers aren’t prepared for massive wealth transfer, expert warns
– With PA
