Digital Assets Can Raise Estate Planning Issues
More and more, we are conducting our business on the Internet, whether that’s online banking, shopping, uploading documents and files to the “cloud,” posting videos, or communicating with ‘long lost’ friends.
So, what happens to all of our accounts and files when we become incapacitated or pass away? Will our representatives have access to them? Where will they find our usernames and passwords? Who can take down our Facebook and LinkedIn pages, or would we prefer that they continue for posterity? And, if we’ve saved photos, videos and other files on the cloud, who should have access to them and how long should they stay out there?
These are questions almost everyone needs to think about today, and they often raise difficult security and legal issues. For example, if you become incapacitated and your daughter starts handling your finances online, is she doing so legally? Presumably you’ve given her your consent to do so, but the bank may not have a durable power of attorney on file with this authorization. As far as the bank knows, you’re still the person logging in and paying your bills or shifting your investments. Is this fraud on the bank? Does anyone care as long as your daughter is acting in your best interest? And what if you pass away and your child, rather than notifying the financial institutions, continues to pay bills online and make distributions to family members? This is clearly contrary to law, but it could be much more convenient than going through the probate process. Is it an instance of no harm, no foul?
States are beginning to grapple with these issues. A few states have enacted laws, giving executors access to online accounts. In addition, every Internet provider has its own rules about access to user accounts, and generally users have agreed to these rules when they first enrolled, whether they actually read the service agreement or not. In April 2013, Google introduced the concept of an Inactive Account Manager who Google users can name to receive notice when a Google user has not accessed his/her account for a long period of time. The Inactive Account Manager has access to Google accounts designated by the user and can take whatever action is necessary to access them or shut them down.
The legalities aside, here are some steps we can all take to better manage our digital assets:
- Inventory your digital estate. Make a list of all of your online accounts, including e-mail, financial accounts, social networking sites and anywhere else you conduct business online. Include your username and password for each account. Also, include access information for your digital devices, including smartphones and computers.
- Store the list in a safe place. There are a number of options for where you and your representatives can store the list, each with its own problems. If you have the list on paper, someone who you don’t trust might discover it and gain access. You can keep it in a safe deposit box but does your representative know where the box key is located? If you keep the list online, make sure you do so securely.
- Give access to your personal representatives. Once you have your inventory, you will need to provide it to the people who will step in if you become incapacitated or pass away, or let them know how to find it when and if they need to do so. Make sure that they save the information as securely as possible.
- Authorizing language. Make sure the agent under your durable power of attorney and the personal representative named in your will have authority to deal with your online accounts.
- Update the inventory. As you open new accounts and services, purchase new devices, and change usernames and passwords, you will have to update your list so that it remains current.
This information is not to be considered legal advice. If you have questions about it, please contact us.