What happens to all of my digital information when I pass away or get sick?
From banks requesting that we receive only online statements, to maintaining our financial lives on Quicken or Quickbooks, there is little — if any — paper trail. Much of the information required to access this information is retained in our brains, for understandable reason. To write down passwords is to invite thieves or other unauthorized access.
But, when you die or are incapacitated, that information dies with you. Moreover, the terms of use of many online providers prevent anyone else other than you to access the information, jeopardizing the ability to recover information, marshal assets, and otherwise administrate your affairs. Some practical sense and a minimal amount of effort can ease a potential burden on you and your loved ones.
What are digital assets?
Digital assets include any online account requiring a username and password; any file or other intangible work stored electronically, whether on a computer, compact disc, flash drive, or in the “cloud” (i.e. services storing information online accessible through the internet).
The terms of use of most online account companies rarely, if ever, allow for the immediate or automatic transfer of the account to the personal representative. Many of them actually provide for deletion of an online account within a certain period of time after a user’s death. Without access to a decedent’s bank and investment accounts, a fiduciary will encounter difficulty in obtaining the necessary information to fulfill the plan under a trust or will.
Without access to a decedent’s e-mail account, it will be nearly impossible to gain access to those sites through the “forgotten password” mechanism. And, without access to a decedent’s social media accounts, blog, or website, it will be near-impossible for a fiduciary to uncover any ongoing obligations such as automatic payments, credit cards, or mortgages.
It is also imperative for a fiduciary to protect the accounts against “hackers” or nosy relatives, pending administration of the estate or trust.
There are two other categories of digital assets worthy of note. The first are individual-created files. These are files we create every day, such as our contact files, digital photos and movies, documents, and financial organization.
The second are individual-purchased files, such as music, videos, and e-books. Usually the terms of use grant a purchaser a non-transferable license to use these works during the purchaser’s lifetime. Yet, those items reside on the individual’s various devices, such as a Kindle, iPhone or iPad, or Blackberry.
What steps can be taken?
You can take steps now to minimize the burden on your present and future fiduciaries.
• Inventory digital assets. Clients should make an inventory list of their digital assets and accounts. This can be easily maintained in a spreadsheet. The inventory should include e-mail accounts, social media accounts, banking institutions, and other online sites frequented, together with the usernames and passwords. The inventory should also include passwords to various computers used.
• Identify your wishes. You should specify your wishes as to each online asset. Do you want your social media shut down, or continued after your death, and for what purpose? Do you want your computers and all of its data given to a particular person, and for what purpose? For example, you might want your writings to be compiled in a memoir, or your digital photographs compiled in albums. You might not want those assets to be made public or posted anywhere, or you may want them disseminated openly and often. Make those wishes known, either in your will or a personal property memorandum referenced in the will. You can also appoint a “digital executor” to deal solely with these digital issues.
• Provide access and control. Many online accounts allow the appointment of an agent. For example, a New York State 529 account allows the appointment of a limited power of attorney to permit that person to access the account and make decisions in your absence.
These lists and materials can and should be kept with your essential estate planning documents, preferably in one binder or file.
Alison Arden Besunder is the founding attorney of the law offices of Alison Arden Besunder PC, where she assists new and not-so-new parents with their estate planning needs.
