There is no question we are in the era of digital everything…from the information we consume to lots of personal and private information, such as accounts. The average person has the majority of their accounts secured digitally with their bank or the organization that they interact with. These accounts include such organizations as banking accounts, investment accounts, shopping, gas, and a host of others. All of these are secured digitally by you and generally have many different logins and passwords to protect the information. This is great…until you are gone and someone else needs to access these accounts to settle your estate.
In as short as the past decade, this has become a real issue for people, including attorneys. Today, when an estate planning attorney creates your estate plan they need to identify provisions for how to access your digital accounts should you pass away or become disabled where you can’t access these accounts. Without a plan to give someone access to these accounts, they can be inaccessible without a great deal of effort.
As explained in Financial Advisor’s article, “Unlocking Clients’ Digital Lives,” if no one can access your digital assets, including accounts, many could be lost, stolen by a hacker or deleted.
Forty-one states and the U.S. Virgin Islands have passed laws that allow a financial planner or other fiduciary organizations to access digital assets upon the death of a client. Four additional states, plus the District of Columbia, are considering similar legislation. This is definitely a trend to try and protect the loved ones of someone who passes away so these assets aren’t lost. In Missouri, for example, the Fiduciary Access to Digital Assets Act allows a fiduciary to be granted access to a person’s electronic records or digital assets in a will, trust, power of attorney or other such documents.
The way we live our personal lives and the way we conduct our personal business and financial matters has changed dramatically. Now we all must address the issue of digital assets in our estate planning to reflect these changes. There are many new challenges created if those digital assets are not addressed in the estate plan. Striking a balance between privacy rights and the need to settle an estate can become an expensive and time-consuming issue.
For example, one family had to file a lawsuit so they could access the emails of their son, a Marine who was killed while serving our country. This not only cost the family substantial attorney’s fees but also created a great deal of stress and strain on an already difficult (and sad) situation. The goal of having this in place is to avoid exactly this type of situation from happening to your loved ones.
If you manage your bill paying and investments online, someone will need to be able to control bill payments, especially if they are on an autopayment schedule. Start by preparing a complete inventory of all digital assets, including a description of each one and how it is accessed with names, passwords and security questions. Find out what each online platform requires if a fiduciary or executor needs to access those accounts. Each platform, like a financial institution, has their own forms and procedures.
This information should be stored in a secure place. Some people prefer a password-protected digital location. Others may choose to give it to their power of attorney to have available should something happen to them.
Your estate planning attorney will be able to help you make sure that your estate plan reflects your wishes for your digital assets. Since you should be updating your estate plan every year as changes in your life occur, make a point to update your digital assets at the same time. Now you should have a current plan for how your wishes will be carried out and those that will be carrying it out will have access to these assets. It doesn’t take a lot of extra time to do but it will definitely save your loved ones thousands of dollars and lots of time.