Asset Planning with a Digital Twist
June 18th, 2013
Much has been written about how family members struggle to get access to the e-mail and social network accounts of loved ones who have died. They have sentimental value much the way photo albums and personal letters do. But far less attention has been paid to the logins, passwords and answers to security questions that will give access to an online financial life.
Do you still check your hardcopy bank statement? What about the checkbook – is it always with you or just tucked away in a drawer somewhere? Now that most of us have “gone digital” with our finances (i.e. online banking, debit cards, etc.), there is a new perspective on protecting one’s assets.
What planning have you done for your digital assets? Would your love ones be able to navigate the system of digital accounts, portals and passwords when needed?
The conundrum of how to understand and plan for the maintenance of a digital life is not new, but it is growing. Everyone – people of all walks of life – has some tie to the internet and most have something worth protecting there. Much can be said about Facebook accounts for their social value and the sentimental value of pictures hosted there, but there is far more to it.
A recent article in The New York Times titled “Leaving Behind the Digital Keys to Financial Lives” picked up on this theme since we do most of our banking and investing online. If you go to the effort to document your legal wishes in an estate plan for the control and management for your estate, then they at least need to know the “what” and the “where” regarding the estate to control and manage.
Unfortunately, digital accounts have few paper trails by their very nature and passwords may change every week. Simply put, you have to plan to hand over the keys to your digital estate and that often can take more diligence than planning for the keys of the family home.
As helpfully summed up over in the original article:
People needed to think about five things to ensure that everything goes smoothly with their digital financial lives if they become incapacitated or die: they need to maintain a list of their digital information; send the information to someone they trust; make sure other people know who has the information; leave instructions for how everything should be handled; and note all of this in an estate plan and update it regularly.
Reference: The New York Times (May 24, 2013) “Leaving Behind the Digital Keys to Financial Lives”