New York Estate Planning & Elder Law Blog
People interested in estate planning are increasingly placing digital asset clauses in their estate planning documents. This unfortunately adds another layer of complexity to estate planning.
As focus in digital assets becomes more popular, the need for adequate estate planning also increases. People want to make sure that their financial planning prospers besides that person’s daily use of digital technology.
A large number of people interested in estate planning have even placed clauses addressing bitcoin as well as other cryptocurrencies into the estate plans of clients. Digital wallets go in combination with digital assets because passwords play a critical role in making sure that your loved ones are able to access your assets after you pass away or become incapacitated. Digital assets including social media, blogs, and email accounts are also playing an increasingly more prevalent role in estate plans.
It’s not just a growing number of people going digital, more people are also counting on digital tools like estate planning software to engage in the creation of estate planning documents.
The Appointment of Beneficiaries.
The increase in digitally influenced estate planning documents is not the only matter complicating issues in regards to estate planning. As today’s family structures become more nuanced, the appointment of beneficiaries is proving to be a primary cause of family fighting after a loved one passes away. Data shows that the number of people who cite the appointment of a beneficiary as a cause of family conflict has gone up sharply over the last few years.
Inability to adequately communicate is also proving to be a common cause of conflict. Reviewing estate planning terms with loved ones before you pass away or become incapacitated can greatly help to reduce family disputes and disagreements. This way, your loved ones know what to expect before something happens to you.
Additional Estate Planning Complication
The increased reliance on technology as well as planning for technology is adding to the complexity of the estate planning process. People who want to make the most of their estate plans are learning how to navigate through both digital assets as well as digital tools. Data management is an increasingly nuanced issue. Estate planners report that the most challenging documents to maintain include powers of attorney, wills with current terms, beneficiary designations, and guardian appointments. The increasing use of digital technology might provide some benefits as more people start to embrace digital storage and the electronic execution of documents.
The financial repercussions of the pandemic are also still widely felt in addition to inflation, increasing interest rates, and the Ukraine war as well as other worldwide concerns. Market volatility has proven to be the biggest threat to estate planning this year and has even gone up slightly from last year. In this existing environment, many people are concerned that market risks can end up ruining their estate plans. For example, people worry that inflation could end up devaluing business or other long-term assets.