Independent Thinking^®

Safeguarding Digital Assets

Increasingly, our lives are conducted digitally. From communicating with loved ones, to storing documents and photos, to conducting financial activities, a significant portion of our activities are online. What happens to our digital lives upon death or disability – and why should we care?

Digital assets comprise a wide range of items, some more obvious than others (see the guide below). Some may have substantial monetary value, and others important sentimental value. Many require multiple levels of username and password verification to gain access. These layers of security protect us when we are alive and well, but can present problems down the road for family members or other trusted advisors. An executor or personal representative administering an estate is likely to need access to bank account statements and legal documents. A spouse or other family member may want to access family photos, digital music files, and shared devices. But hacking into these accounts may be deemed a violation of a provider’s terms of service. In some instances, it may even be criminal activity.
 
Fortunately, there are tangible steps you can take to plan for your digital assets, just as you would your personal property and other valuables. The first step is to create a digital inventory, including a description of each item and the related usernames, PINs, and passwords. This could be in a table or other form, but should be accessible later by those who need it. Storing this list in a safe deposit box may not be practical, since many accounts require regular updates to passwords, and the list of providers is likely to change over time.
 
Instead, consider using a password vault. Password vaults are simple, stand-alone devices that can be purchased at office equipment or electronics stores, and contain all accounts and password information. The device is unlocked using a master key code, which can be given to a trusted fiduciary.
 
The next step is to ensure that your estate plan reflects your wishes for your digital assets, in case of death or disability. Ask your estate planning lawyer to include a digital property powers clause in your will, granting a trustee the power to access your digital accounts. If you have highly valuable or otherwise significant digital property, such as a high-volume website, you might consider appointing a special trustee to handle the property.
 
Individuals can also execute a separate digital property authorization form, similar to a power of attorney, which permits a trusted individual to access and modify accounts. This document might include instructions to preserve or destroy certain digital assets upon death, such as email accounts and social media profiles.
 
Planning for your digital assets can help your family at a time when they may really need that help. Your advisor can help you think through these issues, and will work with your estate planning lawyer to ensure that your wishes are fully executed.