On Friday, October 21, 2016, several waves of cyberattacks disrupted the availability of several popular websites across the United States including Twitter, Spotify, Netflix, Amazon, Tumblr, Reddit, Vonage, PayPal and more. Although the attack annoyed many and made workdays severely less productive, it brought attention to the importance of planning strategies for digital assets and protecting against cybercrime, even after death.
As a caveat, estate planners typically think about the worst case scenarios, so please do not think of planners as being doomsday promoters. Rather, the goal is always to ensure a successful transition of assets to the next generation. Without proper planning, especially in a world where a majority of information is stored online, undesired situations can occur.
Perhaps your identity was stolen at one point or another in the past. Maybe it was just a credit card. Maybe someone obtained your social security number and began opening credit lines without your knowledge. Now, think of a situation where you fail to provide your family with your relevant online account information, and your identity is stolen after death. Without proper planning, it may be impossible for your family to regain your identity and fix the issues the thief has created.
You may think a power of attorney will save you, but power of attorneys are only relevant during your life and while incapacitated. And, if your entire life is stored in the cloud and you haven’t provided access in your planning documents, good luck to those tasked with administering your estate.
Fortunately, there are several steps you can easily take to secure yourself in these situations.
First, make an inventory of the hardware storing your digital assets. Most people have their digital assets spread over several devices, so making a list of all your smartphones, computers, tablets, cameras, and USB drives will help expedite an administrator’s job. I had a client who had $50,000 worth of music stored on a laptop and he was the only person with the passwords to access the library. If no planning occurred, the entirety of the music library would have likely been lost.
Second, think about your complete online presence. Inevitably, you might forget about a few items, but be especially mindful of your online banking accounts and login information. Some of the most common online platforms and assets include:
- Online Banking and Retirement Accounts (e.g. 401(k), IRA, pension, social security);
- Social Media Accounts (e.g. Facebook, Twitter, Linkedin);
- Shopping Sites (e.g. Amazon, Apple Store, eBay);
- Transportation and Delivery Accounts (e.g. Uber, Lyft, Grubhub);
- Email Accounts (e.g. Gmail, Outlook, Yahoo);
- Cloud Storage Accounts (e.g. Box, Dropbox, Sharepoint);
- Organizational Sites (e.g. health insurance, professional organizations, etc.);
- Subscriptions (e.g. Netflix, Spotify, Hulu, xfinity).
Third, think about your work related files and the files in which you are currently working. If you are a professional and have your client files saved among your digital assets, then information should be provided to seamlessly allow your colleagues to pick-up your work and service your clients. Maybe you have been working on a project or you have a very sensitive matter you have not shared with anyone. Instead of having all of your hard work lost or your organization suffering in your absence, why not provide an inventory and instructions for the files.
Fourth, once you have created your inventory, provide for future access to your successors - listing usernames and passwords. You want to choose someone you completely trust (e.g. advisor, attorney, family member). More importantly, your estate planning documents should list the person allowed to access your digital assets. You might include all of the information on a USB drive and then keep the drive in a lockbox. In your planning documents, you can name the person allowed to access the lockbox and the person allowed to access your digital information.
The steps above are tedious. But, in today’s digital world, providing the information could end up saving your estate if your identity is compromised after you are gone.