The Final Log-in: Estate Planning for Your Digital Assets

February 19, 2016

In a world where technology is a dominant feature of life, estate planning no longer entails simply leaving a key to a safety deposit box. Along with accumulating tangible belongings, most people have come to have many “digital assets”—from social media accounts and virtual collections of books and music, to financial assets that are managed online.

This raises important estate planning questions: when you die or if you become incapacitated, what will happen to your virtual possessions and your online presence?

“In today’s technology-dependent culture, controlling access to your passwords and security codes is essential to protecting your personal story, both in life and after your death”.

Why worry about digital assets?

The main reason to leave instructions or direction on your digital assets is to avoid potential issues such as identity theft or account manipulation, and to address any immediate responsibilities such as payments. Clear instructions that outline your wishes will help prevent any delays in dealing with unfinished business.

But there is also your online personal life. “In today’s technology-dependent culture, controlling access to your passwords and security codes is essential to protecting your personal story, both in life and after your death,” says Sara Plant, President and CEO of MD Private Trust Company. “For example, if no one can access your Facebook account, it can’t be memorialized.” Memorialized Facebook accounts are a way for friends and family to share memories of the deceased person. Memorializing an account also helps keep it secure by preventing anyone from logging into it.

Start thinking about what you have

Any comprehensive estate plan should include instructions that relate to digital assets. When gathering a list of your digital assets, think of the following:

  • Digital devices: computers, tablets, smartphones, e-readers, smart watches
  • Email and webmail accounts: Outlook, Yahoo, Gmail, Hotmail
  • Online banking: bank accounts, investment accounts, lines of credit, PayPal, cryptocurrency such as Bitcoin, online gaming accounts
  • Social networking accounts: Facebook, Twitter, LinkedIn, Yahoo, Google, Instagram, Pinterest
  • Online media accounts: Google Docs, spreadsheets, presentations, Evernote, Dropbox, Flickr
  • Videos (e.g., posted on YouTube) and photos
  • Miscellaneous: business assets (eBay), domain names, reward points (e.g., Air Miles), credit cards, relationships with stores

Make a list for your lawyer

MD has created a digital assets and intellectual property memorandum that is made available to clients as part of our estate planning and settlement services.

The memorandum helps you and your MD Advisor compile a list of all digital assets that you would provide to your lawyer as he or she prepares important documents like your will and power of attorney (or in Quebec, your mandate).

Your digital assets list should include the following:

  • personal computing devices and their passwords
  • details for both financial and non-financial accounts, including:
    • account names and numbers
    • user names
    • personal identification numbers (PINs)
    • passwords, including for two-step verifications
    • answers to security questions, if applicable

If you have your own practice, you should also create a list that includes the information required to run the business, such as your client files, web hosting account and e-commerce account. This list is important whether your wishes are to close the practice or to transfer your ownership rights to someone else.

Once your lists are complete, consider backing them up to separate flash drives or external hard drives. Do not include specific passwords in your will, as this is a public document.

Protecting and managing passwords

The number of accounts and passwords that many people accumulate over the course of a lifetime can be a challenge to manage and protect.

One possible solution is to use a password management company. If you take this route, check the business’s credentials to ensure that the service is secure. Additionally, you could create a virtual “vault” for your digital assets list. You could also consider randomly generated passwords to increase online security.

Your passwords should be secure, but don’t forget: they also need to be accessible when the time comes. Whichever way you store your passwords—whether with a password management service, on your computer or in hard copy—it is crucial to update these records when your passwords change. Above all, make sure that your estate executor has access to the master password. You could also consider placing a hard copy in a safety deposit box or other secure location.

By taking steps now to manage your digital afterlife, you can be assured that your possessions, financial affairs and online presence will be dealt with as you would wish.

For more information about estate planning or other financial planning topics, contact an MD Advisor. MD offers objective advice at every stage of your career—from medical school through retirement. Find an MD Advisor near you.

 
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