As a society, we are moving away from keeping documents in paper form, filed away in a filing cabinet. For many, most of the mail we receive in the mailbox is junk.
More and more documents, statements, pictures and bills are kept digitally in files on our computers (with regular backups to an external hard drive or cloud) or on other business’ sites.
In this new age of digital storage, we all need to give some thought to what happens to our information upon death or incapacity. If it has been a while since you last updated your estate documents, they may need to be revised to address this specific issue.
Let’s first address the question of what items are considered “digital assets”. They include:
- Computing devices
- Data storage devices
- User accounts for email, social networking, websites, blogs, etc
- Domain names
- Intellectual property rights
Email is most often the “portal” to access online accounts or passwords. We receive email notification for bills, statements, appointments, etc. Logins and passwords are set up to access websites to manage our bills, do online banking, and to correspond with doctors and medical providers, etc.
Most of us have a list of all the different logins and passwords for the sites we access. If we forget or lose our password we have the site email it to us or send a temporary password so we can change it.
Laws have been enacted to reduce hacking of computer systems and to protect the privacy rights and contents of certain electronic communications and files. It is a criminal offense to access a computer without authorization to obtain information contained at a financial institution such as a bank or brokerage account.
Privacy laws prohibit a company from divulging the contents of electronic communications or files unless they do it voluntarily. You cannot compel them to disclose the information.
What do these laws mean to an executor or power of attorney? It could severely impact their ability to access an incapacitated or deceased person’s devices and electronic information.
Can you leave your iTunes collection to someone else? According to the “Terms of Service”, you are paying for the license to listen to the songs–not buying the music rights. Therefore, you cannot leave them to someone else.
So what should you do? Plan ahead by doing the following:
- As things become more and more digital, it will be important to have specific language in estate planning documents naming a digital fiduciary who can be the executor or power of attorney, in essence giving them a digital HIPAA release.
- Prepare a complete list of logins and passwords, online accounts, and other digital property and assets stating how to access and dispose upon your death.
- Review your estate documents every 3 to 5 years. Now may be a good time to look them over and update especially if they do not have language regarding digital assets.
At Johnson Bixby, we are continually attending conferences and seminars to stay on top of our changing world. This blog post is a result of a Financial Planning Association event and bringing to our attention something that has snuck up on all of us–the heavy use of online access and digital storage and how it impacts everyone’s estate planning. If you would like to discuss in more detail, please contact your planner.