We have become increasingly reliant on digital technologies and the internet in our modern lives. We now have numerous digital assets, from online banking to social media to cryptocurrency investments. However, have you considered what would happen to those digital assets after you pass away?
The Scary Reality of Digital Asset Lockout – When someone passes away, his or her loved ones or executors are often left scrambling to access important accounts, documents, and information. In the past, this search involved going through physical paperwork and safe deposit boxes. However, that process has become exponentially more complicated with most of our lives now in the digital sphere.
Without proper planning, your family members or executors could potentially be locked out of your digital assets forever after your death or incapacitation. There are a few key reasons this disastrous scenario could unfold:
- Lack of passwords and login credentials. Most of your online accounts, financial information, and digital data are locked behind passwords and security questions. Without those credentials, it’s next to impossible for others to access the accounts, even if they technically now own or are responsible for those assets.
- Laws prohibiting unauthorized access. State and federal criminal laws prohibit unauthorized access to electronic devices, data, and communications. These laws are intended to protect against hacking, but they can also block grieving families.
- Privacy regulations restricting companies. Data privacy laws prevent companies and online service providers from disclosing your private communications, photos, documents, and other data to anyone except you without explicit consent.
Important financial information, precious photos and videos, and access to accounts they may need – all locked away.
Taking Control of Your Digital Estate – Fortunately, with proactive planning, you can avoid this digital disaster entirely. Here are key estate planning steps to take regarding your digital assets:
- Use a secure password manager. I strongly advise using a secure password manager app or service to store your login credentials, notes about accounts, and other digital access information. Just make sure your executor can access the master password. A password manager has cybersecurity benefits. I personally use 1Password. You can share specific information “vaults” with people of your choosing. This manager will provide the core of the digital asset inventory.
- If you will not use a secure password manager, create a comprehensive list of digital assets and accounts. From financial accounts to social media to cloud storage, make a list of every online account and asset you possess. Include clear instructions on their location and the usernames and passwords required to access them. Keep this list updated and accessible to your family and/or executor any time you create a new account or change login credentials. This is tougher to accomplish than keeping a secure password manager.
- Don’t forget device access. Your phones, tablets, computers, and external hard drives are the physical keys to your digital world. Include passwords, encryption keys, and other access information for every device you use to interact with digital accounts and assets.
- Formally grant consent through estate documents. Work with an estate planning attorney or online service to update your will, trusts, and powers of attorney with explicit consent for your designated representatives to access your digital assets. Some states may have specific laws regarding digital assets you must comply with.
- Specify social media instructions. Social media is a unique digital asset. Determine if you want aging accounts memorialized or permanently deleted upon your passing. Provide instructions and consent regarding your wishes.
Taking these proactive digital estate planning steps will save your loved ones a massive headache during an already difficult time. Don’t let your digital footprint and assets become a legal quagmire—put a plan in place to ensure a smooth transition.
