Sometimes things that are designed to make life simpler seem to complicate matters further. Take the ever growing presence of the internet.
How many websites, user IDs, and passwords can any one person endure? Especially in this world of changing passwords and identity protection. Mainly due to security reasons, the internet, which was supposed to make everything easier and convenient has become an albatross for those who have decided to be model citizens, and take everything online to electronic storage.
In my world, they call this planning for digital assets. In short, digital assets come in many forms but in general are those assets primarily accessed through the internet. Your digital assets may be your photo collection, social media accounts and the ways to access your financial information.
If your estate plan does not accommodate your digital assets, some items may be lost forever or so hard to find that they end up in the state treasurers unclaimed assets fund rather than in the hands of your loved ones.
Start by making a list of your user IDs and passwords for all digital accounts. Presumably, most of us have that list somewhere. Just in case you’re wondering, criminals are just as happy walking out of your home with a list of user IDs and passwords as they are HD TVs, and know enough to go directly to your desk drawers or under your desk blotter, mouse pad or keyboard.
So the big issue, naturally, is the how and where you store this list. Beyond storing it, you need to go through the painstaking process of updating it as online commerce frequently requires an update to your password. P.S. If your digital site doesn’t require frequent password updates – take it upon yourself to change it regularly to protect yourself. Make sure that at least one person knows where this list is stored. There are websites and apps designed to store passwords – but I cannot vouch for their security processes.
If you do have any digital assets stored on someone else’s electronic cloud based storage, back up that data to somewhere that is within your control. A computer or a storage device. Needless to say, make sure that device is physically safeguarded and contains its own encryption and safety features.
When you draft your estate plan, make sure that your documents provide language giving some other appointed person the right to access your digital accounts. This is something that is evolving under the new stored communications act. Here in Massachusetts, for example, the Supreme Judicial Court ruled in favor of Yahoo, and would give a list of addresses that the decedent would communicate with, but was not required to give access to a decedents e mail messages under its terms of service.
One possible solution is to make it clear, beyond any reasonable doubt, that your personal representative (formerly known as your executor) and any other fiduciaries in your estate plan have the power to either bypass passwords or have the permission to recover or to set new passwords for your accounts.
John P. Napolitano CFP®, CPA, PFS, MST is Founder and Chairman of Napier Financial in Braintree, MA. Visit napierfinancial.com for more information. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investment and financial planning advice offered through US Financial Advisors, a Registered Investment Advisor.