Caring for Digital Assets

We encourage all our clients to read Digital Assets and Fiduciaries to get an understanding of an important and frequently overlooked necessity of personal financial planning: managing online personal data, financial & otherwise. From the article:

“As we live more of our lives online, important parts of our lives continue to live online, when we die. Legally appointed fiduciaries need to access our online lives in order to delete, preserve, and pass along digital assets as appropriate. Estate planning attorneys are increasingly advising their clients of the importance of planning for their digital assets just as they plan for their non-digital assets. And the laws on trusts and estates (and other fiduciaries) are moving slowly towards ensuring appropriate fiduciary access.”

The whole process is made a bit more complex, particularly for those of advanced middle age (and you know who you are...) given changing technology, regulatory requirements, and the particulars of Terms of Service Agreements in place everywhere the stuff is scattered. But it’s important.

Unfortunate circumstances led to our hearing the following discussion among family members, one of whom was the executor of the decedent's estate:

“Do you know Dad’s password for his email account?”

“No. I’m sure he has them written down somewhere...”

“Uh oh. Better not log off, and don’t turn his computer off...”

“Do you have the financial stuff?”

“Well, some of it...”

:::::

The excerpt below gives you a thumbnail of what the pro’s are advised to do. It’s a helpful guide to understanding the process and what needs organizing. Again, we encourage all to read the full article. It’s surprisingly jargon free and easy to understand.

IV. Estate Administration of Digital Assets

A. Checklist of Basic Steps

Victoria Blachly, an observer on the ULC’s UFADAA Drafting Committee, suggests that personal representatives take the following eight steps to address a decedent’s digital assets:

1. Get technical help if necessary.

2. Consolidate virtual assets to as few “platforms” as possible (e.g., have multiple e-mail accounts set to forward to a single e-mail account.)

3. Obtain statements (or data) of the prior 12 months of the decedent’s important financial accounts.

4. Consider notifying the individuals in the decedent’s e-mail contact list and other social media contacts.

5. Change passwords to those that the fiduciary can control (and remember).

6. Keep all accounts open for some period of time to make sure all relevant or valuable information has been saved and all vendors or other business contacts have been appropriately notified, and so all payables can be paid and accounts receivable have been collected.

7. Remove all private and/or personal data from online shopping accounts (or close them as soon as reasonably possible).

8. Plan on archiving important electronic data for the full duration of the relevant statutes of limitations.

Of course, much of this assumes that the fiduciary is granted full access, control and authority over the decedent’s accounts, and is thereby deemed an “authorized user” with “lawful consent,” who steps into the decedent’s shoes for all purposes. Ultimately, fiduciaries need to be aware of digital assets and who is controlling them in order to determine whether their disposition comports with the decedent’s estate plan.

Don’t put this one off. You don’t want to leave your family with a huge mess and another type of catastrophic loss. It’s not limited to financial assets & records. Managing a portfolio of some 20-30 dynamic passwords in a secure manner can be a challenge, and there is some technology that can help.

But we know this: it all starts with an inventory. Today.