Manage Your Digital Assets
With increasing amounts of our time spent online, it can be difficult to keep track of the usernames and passwords for all the activity – email, social media and online financial accounts. But should an unexpected debilitating illness, injury or death occur, what happens to digital assets that have not been properly recorded?
Russell Johnson, senior estate administrator at Northern Trust, learned the answer the hard way. In 2010, one of his clients died unexpectedly at the age of 55. As he does for all clients, Johnson went to the residence to start compiling account statements so he’d know what information to gather for the family and the estate. In this case, however, that was easier said than done.
“This particular client received all of his financial account statements electronically by email and never printed them out,” Johnson says. “Since we didn’t have access to his email, we had to really dig for information and find things on tax returns, anything that had a hard copy.”
Without a proper plan in place, a death or serious illness or injury could mean cash credits, photos, letters, social activity and the like are lost to heirs that might want them.
“Some people think that if they become ill, they will have time to tell people what they would like done,” says Adele McAlear, creator of deathanddigitallegacy.com, a site that explores the relationship between death, social media and technology. “However, the reality is people often are so concerned with the illness itself, they don’t think about passing on how to access and what they’d like done with their digital assets.”
Create a Digital Assets Inventory
$55,000: Average value of personal digital assets, according to U.S. respondents to a 2011 McAfee survey
Making arrangements for digital assets should begin with creating a list of devices and accounts with usernames and passwords, says John Romano, co-author of Your Digital Afterlife.
“It can be as simple as a text file, spreadsheet or piece of paper,” he says. “Just make sure that your computer, email and primary online accounts are listed.”
Consider what is important to you as well as your family. “You may not care about your Facebook or Twitter status updates, but the photos you’ve put online that don’t exist anywhere else may be important to your family or colleagues,” McAlear says. “Think about what you have online that is personal and professional, and whether they are of emotional or financial value.”
Examples include domain names that you own, a personal blog that carries emotional value and account credits on services like PayPal or iTunes.
Once the inventory is created, let a loved one know of its existence and location. “Have a simple, straightforward conversation with an executor or loved one,” Romano suggests. “Tell them how to access your inventory if something should happen.”
25: Percentage of respondents with at least five digital devices per household
Safely Store Your Digital Assets Inventory
A safe-deposit box may sound like the most secure choice for storing a digital assets inventory, but it might not be the most practical option. “The most important thing about maintaining an inventory is that you keep it up-to-date,” Romano says. “The problem is that user passwords change and new accounts are added all the time. Most people won’t feel like updating their list and going to a safe-deposit box every time something changes.”
An online digital estate-planning service might be more convenient when it comes to continuously updating an inventory. Services such as SecureSafe, Legacy Locker and AssetLock promise secure storage of digital documents, photos, passwords and other digital data.
Each service operates differently when it comes to notifying designated beneficiaries of digital assets upon death or serious illness or injury. With AssetLock, for example, designated beneficiaries can unlock an account by signing in to confirm the death. Once the account is unlocked, information and instructions created by the user are sent to designated beneficiaries.
Depending on the amount of data stored and number of beneficiaries designated, services can cost between $1.50 per month to $30 per year to a $300 one-time fee.
It’s important to find the best plan that suits your individual needs, Romano advises. For those with fairly straightforward estates, a simple inventory stored in a secure place might be sufficient; those with more complex estates or with online businesses might consider an online service.
Include Digital Assets in Estate Planning
As another safeguard, Shelley Walters-Walker, estate settlement services manager at Northern Trust, suggests referencing the digital assets inventory in estate planning documents, such as a will or trust.
“You should ask your attorney about including language in those documents that specifically authorizes an executor or trustee, or in the case of disability, whomever has the power of attorney, to have access to these digital assets,” she says.
But Romano advises omitting passwords from a will or any other document that will become a public document. Additionally, you will want to take steps to ensure your executor gains access to your inventory only at the appropriate time, whether that’s when you become incapacitated or upon death.
Currently, the law has yet to keep pace with the fast-moving digital space, so services maintain their own sets of rules when it comes to handing over digital account access. “But estate law will grow to include these assets as part of the estate planning process,” Romano predicts. “In the meantime, people should address their online assets with their lawyers as they create or update their will.”
Secure in Life and in Death
The key to managing digital assets is to avoid becoming overwhelmed at the thought of it. “We’re used to spending so much of our lives online that we don’t realize how many different applications and systems in which we’re creating a digital footprint,” Walters-Walker says.
Ensure heirs can gain access to your accounts – to collect on them, close them or notify others of your passing – by making arrangements now, long before a crisis situation.
“Modern technology is in place to simplify our lives while we’re alive but could complicate things significantly when we die,” Walters-Walker says. “Proper planning could help alleviate many obstacles we leave behind.”