Digital security has never been so important or perhaps so easy. You can unlock your phone with your fingerprint or your face. You can use a password manager to store all your login credentials behind a single master password. And you can secure many online accounts with two-factor authentication (where a website sends a one-time code to your phone).
But all that security comes at a cost when you die or become incapacitated. If you haven’t planned ahead, your loved ones could find themselves shut out of your digital accounts. And that could cause problems ranging from the trivial (their losing access to your Netflix watchlist) to the tragic (their losing access to your family photos on Flickr). They may not even know which financial or retail accounts you have, since so many companies encourage customers to sign up for email delivery of statements.
Welcome to the new frontier of digital estate planning.
“Last time I checked, I had well over 300 accounts saved in my password manager,” says Jeffrey Levine, CEO and director of financial planning at BluePrint Wealth Alliance in Garden City, N.Y. “Some of them are totally insignificant, but there’s no way I would be able to keep track of them. My heirs would be up the proverbial creek if they needed to know what I had.”
What’s more, just knowing which accounts a loved one had wouldn’t be enough. Under many websites’ terms of service — those long legal documents you probably never read — a person’s account might terminate at death. And Levine says it’s technically hacking to use another person’s login credentials.
Fortunately, there are three steps you can take to ensure your loved ones can access your digital assets once you’re gone. Here’s an overview:
Step 1: Create an Inventory
Step 1 is to figure out what your digital assets actually are. “It’s really a very broad list,” Levine says. “A digital asset is really anything that’s stored in 1s and 0s.”
One way to understand digital assets is to think of a digital photo stored on your computer. The computer is a tangible, physical asset; the photo itself is a digital asset. Some digital assets have actual monetary value, such as a cryptocurrency account or a popular Etsy storefront. Some simply allow access to assets that have monetary value, such as login credentials for an online bank account. And some have sentimental value, such as online photos.
Wendi Strom, a financial adviser with LOTUS Financial Partners in Denver who also offers investments and advisory services through Lincoln Financial Securities, says you can’t decide what to do with your digital assets until you figure out what those assets are.
She has her clients record the websites they visit regularly as they create a binder she calls a financial life organizer. “We’re avoiding the worst possible scavenger hunt ever,” Strom says. “We don’t really realize how digitized our life is until the person who’s the keeper of all that information is no longer able to speak.”
Step 2: Organize Your Credentials
Step 2 is to make sure all your login credentials are recorded in a single, secure place your heirs and other loved ones can find when you’re gone. Levine is a big fan of password management apps like LastPass, Dashlane and RoboForm. If you save all your passwords with such an app — and configure it to update changed passwords automatically — only a master password will be needed to access all your credentials.
What’s more, Levine says, people who use a password manager end up building a list of all the sites they visit over a period of time. “After a while they realize they’ve visited 100 sites over six months, and we’ve got them all in there,” he says.
Alex Glazebrook, director of operations for OATS (Older Adults Technology Services) in Brooklyn, N.Y., likes the password manager built into the Google Chrome browser.
“We use Gmail and the whole Google suite pretty extensively (in training older adults),” he says. “You can have Google set to store all your passwords for all your accounts. Then it creates an up-to-date list in your settings of all the websites you’ve logged into with that browser with the most up-to-date passwords.”
If you don’t trust digital solutions, you can maintain the list on paper or on your computer. But regular updates are a challenge, as is finding a secure yet accessible place to store the list. “It’s great that you have it in the safe, but how do I get it out of there?” says Peter Creedon, CEO of Crystal Brook Advisors in Mt. Sinai, N.Y. “Or where’s the key to the safe deposit box?”
Step 3: Name a Digital Fiduciary
Finally, it’s important to name a digital fiduciary or executor in your will, someone who will manage the digital assets for your estate. “That’s not super common yet, but it’s getting more mainstream where you see people plan to put digital executors in their will,” Glazebrook says.
The attorney who draws up your will can also help you understand how state law affects digital assets. Levine says most states have now adopted the Fiduciary Access to Digital Assets Act, sometimes known as RUFADAA.
Drafted by the Uniform Law Commission , RUFADAA outlines three levels of control over a digital asset. First priority goes to an online tool created by the service provider, such as Facebook’s Legacy Settings tool or Google’s Inactive Account Manager tool. Second priority goes to the deceased’s will. Third priority goes to the service provider’s terms of service.
Even if you aren’t ready to name a digital fiduciary yet, it makes sense to take advantage of tools like those offered by Facebook and Google. If nothing else, your heirs will be able to shut down your Facebook account so people don’t get birthday reminders or friend suggestions years after you’re gone.
Whatever you do about your digital assets today, you’ll likely need to do something else tomorrow, according to Levine.
“I think three years from now you’re going to have a complete different set of tools out there, or the tools that we have will be twice as powerful and do twice as much,” he says. “So I think it’s important for people to continue to pay attention to this. We always say, ‘update your plan;’ this is part of your plan.”
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