Confronting our own mortality is never a pleasant task, and as a result, estate planning considerations tend to take a back seat in the financial planning process. Indeed, an estimated 55% of Americans are currently living without a will or other estate plan in place, a number that is only slightly better for older Americans (an estimated 51% for those aged 55 to 64). It’s not a phenomenon that’s limited to childless individuals, either—an estimated 50% of families with children lack proper estate planning documentation.

Even for the 45% of Americans who do have estate plans in place, those plans tend to hew to traditional paths only—simple wills, medical directives, life insurance policies, and possibly a trust to enable a trustee to handle financial affairs on behalf of minor children. Largely left out of the conversation is the typical individual’s ever-growing list of “digital assets”, those belongings that aren’t necessarily stored in a box in a dusty attic (or in a folder in a file cabinet) but nevertheless often hold substantial value.

If something should happen to you, would your loved ones necessarily know where to find all of your assets, or how to access them? Or would those assets simply be lost and abandoned, with nobody even realizing they’d existed? Now more than ever, it’s important to make digital estate planning a part of your ongoing legacy planning process.

Take an inventory

First and foremost, it’s vital to compile an easily accessible (but secure) list of the assets you hold. One of the first and most obvious assets to list would be any web-based bank or investment account that might not send you regular statements (banks like Ally, HSBC, and USAA have made a name for themselves in recent years with banking services that eschew the traditional brick-and-mortar branch setup), and that therefore might not immediately make itself known to your loved ones after your passing. Even United States Savings Bonds and Social Security accounts have recently switched to a more web-based presence, breaking with decades of paper-based tradition.

But digital assets don’t stop at traditional financial assets. Your online footprint can extend to include assets as varied as music, e-mails, photo albums, domain names, digitized movies, YouTube videos, PayPal balances, e-books, and even assets tied up with certain memberships or subscriptions (think Netflix, Amazon Prime, iTunes). The emergence of Bitcoin has also created an entirely new category of digital financial asset, one that few estate plans have evolved to properly include.

If you’re comfortable working with them, many web-based legal firms provide templates or services (like digital “trusts”) to assist with the process of building a digital inventory. It’s a rapidly growing and changing area of the estate planning industry, so the offerings are evolving as we speak. Find the option that works best for you, and go with it.

Increasingly, we’re storing many of our most important files and keepsakes “in the cloud”, and if we don’t let anyone know  that  we’re   keeping   them   there, then nobody will know how to find them. Don’t let your laptop (or your smartphone) become a locked safe that nobody can crack; chances are that you’ve got too much stored there not to pass it along to your loved ones.

Enable access

But taking inventory is only the first step in the digital estate planning process. Once you know what you’ve got, you still need to enable your loved ones to access the assets—it’s no good knowing that a safe exists if you don’t know the combination to the padlock.

Obviously privacy concerns prevent many people from creating a central database of usernames and passwords, and that’s understandable—you don’t want to create a master key to your online life, only to see that key fall into the wrong hands. Look no further than the recent skirmish between Apple and the FBI to see what a hot-button issue technological security has become, and with good reason.

The good news is, you might not have to create that master key. Many popular online account services (Facebook, Gmail, LinkedIn, and Twitter, for example) have created and maintained deceased-user policies to help overcome the hurdles of digital estate planning, so that your heirs can authenticate themselves using methods other than your username and password. Most sites have specific policies in place for how to handle inquiries from estate executors and attorneys, and each policy is different.

So, once you’ve compiled your digital asset inventory, it’s a good idea to contact each of the companies with whom you have an online relationship and find out where they stand. Sometimes you’ll learn that your digital assets can’t be transferred to the next generation (that’s often the case with media like music and e-books), which is still important to know.

Incorporate the information that you gather into your inventory so that your loved ones not only know where to look, but what to ask when they do make calls or send e-mails on your behalf. The more information you’re able to give them, the better you’ll be able to ensure the smooth passage of your digital assets when the time comes. If you give your heirs an incomplete road map, they may get lost and frustrated and just give up trying. That’s an avoidable outcome, given proper planning.

Update your information often

Like most estate planning, caring for your digital estate isn’t a one-time process, but a dynamic one. Most people are constantly opening and managing new online relationships, and you’ll need to update your inventory (and brief the relevant people) on those changes if and when they are significant. There’s generally no paper trail associated with no web-based relationships, so if you don’t create one for yourself, nobody else will be able to follow it.

For the most important relationships (typically your banking relationships, but not always), you’ll have to periodically check in with the relevant people to make sure that the firms’ deceased-user policies haven’t changed. If they have, you’ll probably have to make changes to your own digital estate plan accordingly.

At Cypress, we work with our clients to take a full inventory of all their major financial assets on a regular basis, which helps to ease the transition process significantly if and when the unthinkable happens. But if even you don’t know where all of your assets are held, there’s little we can do to help. Take an inventory, share it with your heirs, and consider sharing that inventory with your financial advisor and estate planning attorney as well. Otherwise, those assets might die with you, whether you would want them to or not.