Estate Planning for Digital Assets
Today, our most important assets are managed digitally. Online banking, photo storage, cloud backups and even our social media presence. If you were to pass away or otherwise become disabled, would you loved ones know how to access or manage these assets?
You may have seen a story earlier this year from the Washington Post about the trouble one woman went through because she didn’t know her husband’s password. Peggy, 72, lost her husband to cancer. To pass the time, she liked to play games on their iPad. One day the device required her husband’s iCloud password, which Peggy didn’t have because her husband never told her. When Peggy contacted Apple attempting to gain access to her late husband’s iCloud account, they initially required a court order - a time-consuming and expensive process - to give her access to the account.
While Apple and Peggy ultimately resolved the issue, this type of problem is not uncommon and highlights the need for planning for digital assets in the event of death or incapacity.
I believe a multi-step approach to planning for digital assets in the event of death or incapacity is best. A comprehensive estate plan should include language that allows fiduciaries (your trustee, personal representative or power of attorney) to manage online accounts and assets. In fact, Florida recently updated their laws regarding a fiduciary’s access to online accounts. If you have older documents that don’t address digital assets, it may be time to look at an update.
Additionally, I recommend clients take time now to evaluate their digital assets and make sure they have a secure and organized way to store usernames, passwords and related information along with a method for sharing that information with their fiduciary. This way access to these critical accounts will not be lost or delayed with an expensive court proceeding.
You may want to consider making use of a password manager or similar service to securely organize and store digital information. Password managers have the benefit of allowing users to use secure and unique passwords across all of their online accounts while only having to remember one password to access all their information. As of this post, I personally use 1Password to manage and store all my digital data. LastPass is another popular service.
The creators of 1Password have written a blog post about using their software as part of an emergency plan. I store all of my important digital information within 1Password and then use a version of Mike Vardy’s “1Password Emergency Kit” which I keep with my important paperwork so my family will have access to the information inside 1Password incase of emergency.
If you prefer a low-tech solution, you can write down your username, passwords and related information in a notebook. Just make sure you keep the information stored securely and updated regularly.
Of course, all situations are different so you’ll have to decide what information you’re comfortable sharing and how you want to grant access. Nevertheless, it’s important to think about digital assets and access as part of a comprehensive estate plan. If you have any questions about creating a comprehensive estate plan, contact my office to setup an estate planning consultation and we can address this and other issues.