If you are like me, you prepared a will, establishing financial and health care powers of attorney, and set up a distribution plan as part of an estate plan. Have you included your digital assets and online account information in your estate documents?
A recent article from Smart Money made me pause and think. “Have I done enough to protect our family’s digital assets and make them safe for the future?”
What Are Digital Assets?
Digital assets can range from things with obvious financial value (online bank and brokerage accounts, and Web-based businesses) to less obvious but still valuable properties like domain names, blogs, Twitter accounts and even social media pages like Facebook. Without log-in information, access to those Web accounts and services may require hiring a computer-forensics expert or obtaining a court order.
Unfortunately, digital assets and online account information are often left out of the estate planning process preventing loved ones from accessing and caring out our wishes regarding our digital property. Most accounts are password protected and have terms of service that prevent third parties, including family members, from accessing the accounts without the accountholder’s permission or a court order.
Legislation governing digital asset management after death has been passed in only five states (Oklahoma, Idaho, Rhode Island, Indiana, and Connecticut). Even in these states, the laws are just now being tested.
A Missouri Situation
When Missouri estates and trusts lawyer Robert Kirkland was preparing a will for a client several years ago, it never occurred to him to include any provisions about electronic bank statements or e-file tax services, both of which were then relatively new.
The result of that omission became clear only last year, when the client died unexpectedly — and his wife had no way to access their joint online bank accounts and the other key financial records that were stored digitally. After weeks of trying to guess her late husband’s passwords, the widow finally had to call on some IT specialists to hack into his computer. Kirkland still cringes when he thinks about it: “It was a headache on top of a heartache,” he says.
The Digital Estate Problem
As more and more of our lives goes online, estate planners are grappling with how to advise clients to secure and transfer their virtual estates — the bodies of non-tangible, digital assets people create and store on their computers and the Internet. Thirty-six percent of adults over age 45 now do their banking on the Web, according to the Pew Internet & American Life Project, and millions of people store some financial records online, which are often locked behind myriad user names and passwords.
Gene Hennig, one of Minnesota’s commissioners to the Uniform Law Commission, said that a court order is one of the few options families have in obtaining access to a loved one’s online accounts.
“You’ve got to hire lawyers. It’s time-consuming. Some people may go to all that trouble and it took forever to get the order and by the time they got it, the stuff had been destroyed. It’s just an unworkable and very inefficient way of doing things,” Hennig said.
What Can You Do?
Talk to your estate planner. Some estate planners are creating step-by-step instructions for how heirs can access and transfer virtual properties after a client’s death.
For starters, working with your estate planner, you can take inventory of all your digital accounts and store an updated list of passwords on a flash drive, locked in a safe. Some pros are also looking to websites like Legacylocker.com and AssetLock.net, which enable users to release account information to designated beneficiaries after their death.
Taking even a few modest actions now, says New York attorney Bernard Krooks, can keep your assets from getting lost in a cybercemetery.
The article from Smart Money forced me to think about my own digital assets and how I want to make them more secure. I hope it gives you additional ideas to consider about making your digital world a safer place for you and your family and for the future! Be safe.
Much of this information was taken from the article in Smart Money.