The reach of the electronic age seems to know no bounds, but we are still figuring out some of the fall-out. For example, consider the estate planning consequences when you leave online accounts and files when you pass away, not to mention passwords that have not been disclosed to others.
In this day and age, it is not enough to develop an estate plan based on paper documents such as a will. You must also account for any “digital assets” comprising part of your estate.
The laws in the individual states pertaining to these issues are continuing to evolve. For instance, in some states, executors are given access to online accounts. In addition, online services have their own rules governing user accounts. Accordingly, here are six ideas for managing your digital assets in 2022.
- Create an inventory. Make a list of all of your online accounts, including e-mail, financial accounts, social media sites and any other site where you conduct business online. Record the vital information—including usernames and passwords—for each account as well as your other digital devices like smartphones and computers.
- Store information for safekeeping. There are several places you can store this information, but be careful. For instance, if you write it down on paper, it can fall into the wrong hands. Alternatively, you might keep it in a safe deposit box or give it to your attorney to hold. But remember that others will still have to know where it is located. If you decide to store the information online, use a secure and reputable service.
- Grant access to personal representatives. Once you have created your inventory, notify the people who will need to act if you are incapacitated or pass away. Most important, let them know where to find the necessary information and how to access it. Remember that they should adopt the same security measures as you do.
- Coordinate with paper documents. These will work hand-in-hand with your digital assets. Typically, you should ensure that the attorney-in-fact named in a durable power of attorney and the executor designated by your will have the authority to deal with your online accounts. Your attorney can provide the necessary language for tying up any loose ends.
- Stay up-to-date. When you acquire new accounts and adopt additional services and devices, or change usernames and passwords, you must update your list so that it remains current. Try to check it periodically, but certainly review the list at least once a year.
- Seek professional guidance, when appropriate. As mentioned above, you do not have to go it alone. Work with your professional advisors as part of the estate planning process.
Finally, take advantage of the positives available through modern technology, but beware of the potential negatives.