Include Your Digital Assets when Making Plans for Your Estate
My dad was one of the most organized people I have ever known. He had lists for everything – including his online account passwords. It was not until he passed away that I realized how helpful his organization would be to the family he left behind. My dad’s digital password list saved the family countless hours and enabled us to gather his important data before closing down his online accounts.
The use of digital devices and social media is a widely accepted and integral part of modern day life. With increasing frequency, individuals are creating complex lives online, which may include a social media presence, email accounts, electronic banking, reward point balances, and online investments. Many people also store online digital assets that can have strong sentimental value, such as family photos or musical collections.
As the types of assets that we store in digital formats continues to expand, important new issues arise, such as whether or how your loved ones will access your accounts should something happen to you. From a practical perspective, it is prudent to provide your trustee or executor with a list of online accounts, usernames, and passwords to enable access to your personal and financial information.
The issue of digital assets and estate planning does not concern only the younger generation. The increased accessibility of technology has also attracted a large portion of seniors, including many who may already have estate plans in place. It is a good idea to review and update your estate plan periodically, especially when you have significant life changes. The organization and implementation of digital asset planning should be an important part of these updates.
As for social media, special concerns may arise with respect to personal preference surrounding how these accounts are dealt with post-death. Some may prefer to have these accounts shut down altogether, whereas others may opt to have them memorialized in such a way that friends and family have a place to share memories. Given these different approaches, it can be useful to provide some direction to your executors regarding your specific preference on the issue.
Here are some guidelines for planning ahead for data and online accounts so that fiduciaries and family members can access your data if you become unable to access your data yourself.
First, create a digital asset inventory that lists your online accounts and digital property. You should include details such as your relevant usernames, passwords, and secret questions to enable access to your personal and financial information. There are a number of ways in which this can be accomplished. For instance, it could be a simple written list or an encrypted electronic list given to your executors prior to death or attached as a memorandum to your trust or will. Whatever the form, you should keep your list secure and update it regularly. Note that I do not recommend including your digital asset list within your will, as it may be made public if the will is probated.
Second, if you have been storing valuable or significant data exclusively in online accounts (for example, your digital photos), it’s important to regularly back up that data to local storage media—to your computer’s hard drive, a USB flash drive, a CD, a DVD, etc.—so that your fiduciaries and family members will have access to that data without the additional obstacles involved with online accounts.
Third, make sure your estate plan specifies your wishes about your property and appoints a fiduciary to act on your behalf with respect to all of your property – including your digital property – during incapacity and after death. This may include preparing a durable power of attorney, a will, and a revocable living trust (if appropriate for your situation).
Planning ahead for your digital property is essential for providing your loved ones with access to your data, for keeping estate administration costs down, for providing a smooth estate administration, and for ensuring that none of your valuable or significant digital property is overlooked. Contact your estate planning attorney today to include your digital property in your estate plan!