What are Digital Assets?
Digital Assets are any online account that you may own or any file you have stored on your computer or other digital device. This includes your online banking account, social media sites such as Facebook, LinkedIn or Twitter, your email account or websites you may own. They may be stored on a desktop, laptop, smartphone, ipad, tablet, flashdrives. The list is endless. If you are good about creating unique and secure passwords, then each account will have its own string of unique and complicated characters to access each. If you’re not good about creating secure passwords… you should be.
The Issue
When I ask clients if they have any digital accounts a vast majority say they do. When I ask them if something happens to them, where is the information for accessing those accounts, almost everyone points to their head. “It’s all in here.” But what happens when your unable to share that information when it’s needed? That’s where Digital Assets Planning enters.
I have a Power of Attorney…
Traditional estate planning is not enough to plan for Digital Assets. The laws have simply not caught up to the realities these assets have created. Making things even more complicated, each service provider may have its own policies about dealing with these assets during incapacity or post death, or worse yet, they have no policies at all.
That’s why proactive planning in this area should not be overlooked.
Why is it Important?
Identity Theft
Identity theft is a prevalent concern and there are steps that should be taken to prevent this. When an individual become incapacitated, whether temporarily or with an advancing disease, they can fall prey to identity theft simply because their accounts are not being actively monitored.
Access
Once a person is incapacitated or passes away, the agent, executor or trustee must take over and manage the assets. If there are online accounts, they cannot access then this work becomes much harder and sometimes near impossible. Having access to online accounts will also make the estate administration process much quicker and easier on your trustee since they can manage all accounts much more conveniently.
Value
You may think “My online accounts have no monetary value so why bother?” But often these accounts have tremendous sentimental value. In the digital age we live in, many photos and personal items may only be available through these accounts and are often treated as a person’s digital backup for a lot of information. You will want someone to have access to that if you can’t, or risk it being lost forever.
Business
If you own a business, you likely have even more digital assets than the average person. You may have online banking, online credit accounts, domain names, a website, social media accounts, online advertising and more. As a part of the continuation of your business, it should be a priority to pass this information on to the next business leader. The alternative is your business suffering exponentially more than necessary after they are already suffering the absence of a key person from the business.
What do I do?
Make it a Part of Your Estate Plan
Your will, trust and property powers of estate planning lawyer can pass the management of Digital Assets on to a trusted person you designate. If you have a particularly valuable Digital Asset, then a separate Digital Asset Trust can be created. But these documents will not specifically state the asset and how to access it. Therefore, it’s important to leave that information in another format for your trustee.
Identify the Assets
Create an inventory of your digital assets. Include information such as the url, what account it is and the username, passwords and answers to the security questions. There are several ways that you can do this. If you information is not that difficult to manage, you can handwrite a list of the sites, usernames, passwords etc. and include it with your estate planning documents which you keep in a secure place. However, passwords change often and this can become a tedious job, or the information will remain outdated and of no use.
You can keep this list on your computer, however, it must be an encrypted file and you would need to leave instructions with your estate plan on how to access it.
A better solution is to use a password manager or an online service for managing your digital assets.
Password Managers
There are programs you can use to manage your passwords. Not only do they have the ability the store your usernames and passwords in a secure location, but they can also create unique passwords that are much more secure than what you can remember in your head.
For instance, LastPass (https://lastpass.com/) is a program that you can use on your desktop for free. There is a charge of $12 per year if you want to be able to also use it on your mobile devices. It will manage all of your passwords, usernames, create secure passwords and also has the ability of creating secure notes. With a secure note, you can make entries which include your security questions and answers so that your successor can access your accounts. It tracks all password changes for you as they happen. All you would need to do is pass along the secure master password for LastPass in your estate planning documents.
There are other services which provide similar services such as KeePass (https://sourceforge.net/projects/keepass/) and
1 Password (https://itunes.apple.com/us/app/1password-password-manager/id568903335?mt=8).
Online Services
There are numerous services which will store your password information and pass it on to another person that you designate upon your incapacity or death. But beware for using these services as a replacement for estate planning. Many services promote their use for passing on the assets, but this does still need to be done as part of a traditional estate planning process. You cannot skip the process and simply type a name in a box on their sites. That being said, they are still a good source for access management.
What’s Next?
Hopefully the legislature will catch up with the digital age and provide a route for agents, executors and trustees to access Digital Assets in the future. But for now, it’s up to you to make sure it’s taken care of.
Please feel free to email or call with any questions.
AMC Legal, P.C. 630-590-3640 info@amclegal.net
This is not legal advice and you should seek the counsel of an attorney.