Protecting Your Digital Assets
Written by Bogutz and Gordon
If you are reading this article, you have a digital life. That digital life is something to consider addressing in your estate plan – or at least in instructions for your financial agent, personal representative, or trustee.
These days, most of us have at least some kind of digital presence. Consider:
- E-mail and stored contacts
- Online bank and brokerage accounts
- Electronic statements and bill pay
- Social media accounts (Facebook, Twitter, LinkedIn)
- Digital subscriptions (Netflix, cable, music services)
- Reward accounts such as frequent flier miles
- Storage, file backup, and cloud computing (Flickr, Dropbox)
- Domain names and websites
- Blogs or online gaming
- Online retail accounts (eBay, Amazon)
- Tax records stored on hard drive or online
These “digital assets” may be associated with several different e-mail accounts, and all have different usernames and passwords and sometimes additional security questions.
A personal representative is charged with securing a decedent’s assets and then distributing them to the beneficiaries—either named by you in a will or determined by statute if you have no will. If something happens to you, will your loved ones be able to access your digital life to figure out what you have and how to deal with it? Will they know what your wishes are with regard to any of it?
The legal landscape with regard to what are often referred to as “digital assets”is murky at best. Laws including the federal Computer Fraud and Abuse Act penalize “unauthorized access” to computers and data, and others, such as the federal Stored Communications Act, are designed to protect privacy. Laws such as these cause problems for loved ones seeking access to an incapacitated or deceased person’s accounts. Family members sometimes have to choose between breaking the account rules or the law and losing the information.
A few states (including Virginia, Connecticut, Idaho, Rhode Island, Indiana, and Oklahoma) have laws on the books to help fiduciaries gain access, but most are viewed as inadequate. (Virginia’s law, passed just last month applies only to deceased minors.) The issue is beginning to be addressed more broadly. The Uniform Law Commission, which recommends uniform state laws, is working on a statute that all states could adopt so there is consistency from state to state. That, of course, would do nothing to alter the federal laws.
In the meantime, you can take steps to help your loved ones discover and deal with your digital life. Compile the additional information and instructions your personal representative may require because part of your life is digital. Perhaps even name an additional person in your will to handle your digital stuff, maybe someone with some tech sense in terms of accessing accounts and recognizing their value.
Most essential: a list of your online user names, passwords and other prompts for accounts your personal representative would need to access.
To do this, inventory your digital activities for a period of time and catalogue all of the relevant information. Keep updating the list as you add more accounts or change passwords. Don’t forget the password to the computer itself. Provide some level of detail, such as which bills are auto pay, which are electronic but require action.
You’ll want to keep the list in a secure place. While a safe deposit box may seem like a good idea, consider how likely you would be to visit the box every time you open a new account or change a password. A home safe may make more sense. Let a trusted loved one know the list exists and where to find it.
Another option is a paid service, such as SecureSafe, Legacy Locker, or Assetlock to store information and alert loved ones in the event something happens to you. It should be noted that these sites are untested and may not survive you, so proceed with caution.
Secure Safe provides storage for documents and password management, and claims its storage is “as safe as a Swiss bank vault.” It has a careful process for allowing”beneficiaries” access to the information when the time comes. Basic services are free, but fees kick in for additional storage and services.
Legacy Locker allows you to store passwords and name a beneficiary for each of them. Upon death or incapacity, there is a multi-step verification process before any information is released. It’s free for three assets, and $29.99 per year or $299.99 one-time fee for unlimited assets and beneficiaries.
Assetlock (aka Youdeparted.com) purports to be a “secure electronic safe deposit box”where passwords; copies of important documents; and final instructions, wishes, and messages can be stored. Plans range from “Basic” (20 entries, 20MB of storage; $9.95 per year or $59.95 one-time fee) up to Ultra (unlimited entries, 5G of storage; $79.95 per year, $239.95 lifetime).
WARNING: Some similar sites seem to allow you to make bequests of your assets. Bequests, however, must satisfy statutory requirements of making a will, which in Arizona and most other states, means in writing and witnessed. Additionally, Bogutz & Gordon, P.C. has not tested, analyzed, or reviewed these sites or products, nor do we endorse them, and they are mentioned just as samples of the products available.
Consider each digital asset and what you would like to see happen to them and include an instructional letter with your documents explaining your wishes. Think about whether you would like your accounts kept as-is, transferred to someone else, or shut down. Who, if anyone, should have access to your private e-mail? If you have an active blog, would you like someone to continue it or post a final entry notifying followers of your passing? For online storage of photographs, research, writing, etc., would you want someone to be able to download the material as a memento or record of family history? Are there online communities you frequent and would you like to inform members of your passing?
If you have digital assets that have monetary value, consider addressing them specifically in your estate planning documents.
Ultimately, nothing digital is permanent, so there is no guarantee that your digital life will be preserved or passed on to your loved ones. To be completely safe, transform the important items into tangible objects: print them and put them in a safe place.
Like most important estate planning concerns, the goal is a practical one. Will the right people have access to the information you want them to have when necessary? Will the information be safe until it is required? And have you made sure that the wrong people will never have access to this information?
- Step by step guide: http://www.lifeinsurancefinder.com.au/infographics/expert-guide-to-protect-yourself-online-before-you-die/
- An excellent chart on services and their policies: http://guardianlv.com/2013/02/who-will-inherit-your-digital-assets/
- Specific considerations for spouses: http://online.wsj.com/article/SB10001424127887323644904578272352355489198.html?mod=rss_asia_whats_news
- General guidance: http://www.thedigitalbeyond.com