Finances FYI Presented by JPMorgan Chase
When it comes to looking to the future, one of the most important steps you can take is forming an estate plan. Unfortunately, because estate plans are meant for use after your death or incapacitation, it can be uncomfortable to think about estate planning or discuss it with your loved ones.
In addition, estate planning has changed over the years. What used to just be about real estate and tangible assets should now include digital assets as well. It might be odd to think about leaving digital assets to your loved ones, but you should definitely consider these important pieces of your estate in today’s financial landscape.
By learning about the basics of estate planning and incorporating digital assets into your plans, you can effectively manage where your assets end up when you’re gone.
Estate planning is a term generally applied to the steps taken to create a roadmap for a person’s assets when they die or become incapacitated. These steps usually include creating a will that outlines which assets should go to which relatives, what nonprofit donations will be made, and how estate taxes should be settled, among other things. An attorney typically helps create these plans.
Estate plans are smart because they create a clear, actionable path forward for your family and friends so that your property and other assets can be disseminated according to your wishes. These plans also provide your family with a sense of security because they know they’ll be taken care of after you’re gone.
To get the ball rolling on your estate plan, start by taking an inventory of your assets, including real estate, property like cars or collectibles, bank accounts, life insurance policies, and investments. Then, think about your priorities for protecting and caring for your family if something happens to you. You’ll have to choose someone you trust as your power of attorney and make several other important decisions.
With so much of our lives taking place online, it’s increasingly important to include digital assets in your estate plans. Digital assets include your various accounts, as well as movies, music, and books, photographs, or cryptocurrency. Any of these can and should be included in your estate plans if you value them and want your family to be able to access them.
Like with your physical assets, start by taking an inventory of your digital assets, including making a list of your login information. Along with this list, include notes about what you’d like to have done with these accounts, whether that means transferring them to another person, closing them down, or some other option. For more complicated assets like cryptocurrency, it’s crucial to keep records stating what you own and how it can be accessed. Because cryptocurrency often doesn’t come with a paper trail like a regular bank account, you must help your loved ones keep track of what you own, as well as the information for how to access the assets, such as digital keys or passwords.
Overall, it’s a wise and valuable exercise to plan out how your assets will be handled after your death, both for your own peace of mind and your family’s future security. Making sure to include your digital assets will allow your loved ones to fulfill your final wishes in all matters, not just the physical ones. Starting with a few basic steps, you can provide those around you with a clear path forward after you’re no longer with them.
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.