How to Organize Digital Assets

Did you ever wonder what happens to old emails, videos, or photos when people die? Some family stories become headlines, when families battle with big tech firms to get their loved one’s photos or business records. Today, you need to plan for “digital assets,” as explained in a recent article “Don’t leave grieving relatives searching for your passwords: Here’s how to organize your digital life before you die” from USA Today.

Your digital life includes far more than your photos or business records. It includes financial accounts, like PayPal or Venmo, websites, videogames, online investment portfolios, social media, online video games and anything for which you need a password.

Social media accounts that are not closed down or deleted when someone dies, are at risk of being taken over by cybercriminals, who use the accounts to get access to financial accounts and use the decedent’s identity to commit crimes across the internet.

Start by making a list of all of your accounts, including account numbers, usernames and passwords. If the account has two-factor authentication, you’ll need to include that information as well. If the account uses biometrics, like a facial scan, you’ll need to find out from the platform itself how you can create a directive to allow another person to gain access to the account.

Your will needs to reflect the existence of digital assets and name a person who will be your digital executor. Many states have passed legislation concerning how digital assets are treated in estate planning, so check with your estate planning attorney to learn what your state’s requirements are.

In many cases, the best option is to use the platform’s own account tools for digital assets. Google, Facebook, PayPal, and a number of other sites offer the ability to name a legacy contact who will be able to gain some access to an account, to access the information and to delete the account in the event of your death.

One big issue in digital estate planning is that some platforms automatically delete accounts and their contents, if the account is inactive for a certain amount of time. Content may be lost forever, if the proper steps are not taken.

Some financial advisors maintain online portals, where their clients may store important documents that can be accessed from anywhere in the world. This may be an option, in addition to keeping a list of digital assets in the same location where you keep your estate planning documents.

We all live in a digital world now, and when a person dies, it’s challenging to locate all of their accounts and gain access to their contents. Your grandchildren may be able to figure out some workarounds, but it would be much easier if digital assets were part of the conversation you had with your children when discussing your estate plan.

Reference: USA Today (Nov. 25, 2020) “Don’t leave grieving relatives searching for your passwords: Here’s how to organize your digital life before you die”

What’s Happens to Digital Assets, When You’re Gone?

We all have many more digital assets than we realize. What happens to those assets when we die?, asks Investment News in the article “4 ways to help clients control their digital afterlife.” The answer is not that simple. There are a large number of rules that survivors must untangle, and many family members are stunned, when they find that not only don’t they have access to these accounts, but the data in the accounts may be deleted permanently, when they try to log in too many times.

Almost all states have passed the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), and experts are gaining a better understanding of how this law works and what happens to digital assets when owners die.

Start by naming a digital assets fiduciary in your last will and testament. This person will be able to gain access to digital assets, as directed in the will. If they list their wishes for specific disposition of the assets, their wishes supersede the terms of service provision of each individual site.

Note that these provisions apply ONLY if clients take specific action. Education of family members is important here. This should be part of the overall estate plan.

Start by creating a complete inventory of all digital assets. Try using these categories:

  • Communication: email, contacts, login for phone
  • Rewards programs: hotels, airlines, restaurants
  • Shopping: eBay, Craig’s List, Amazon, department stores
  • Online storage sites: iCloud, data backup sites
  • Finances: online payments, banking, investment accounts, cryptocurrency
  • Social media: Twitter, Instagram, LinkedIn, Facebook, Snap Chat, WhatsApp
  • Gaming sites and fantasy leagues—especially if there is real money involved.

Make sure your will has a provision that names a digital assets fiduciary, as well as an alternate, if that person cannot serve.

In a separate document or in the will itself, list your wishes for each and every digital asset. Do you want your social media sites memorialized or do you want them shut down? Who gets your airline frequent flier miles? Who should have access to emails, taxes and social media sites? Where should pictures go?

It may be easier to use one of several available services that generate secure passwords for each site and store the passwords and usernames. Using provisions for denial of access until death, the named digital fiduciary should have the master password to that service, plus instructions for any two-factor authentication. Remember that your will becomes a public document upon your death, so don’t put any passwords in that document.

Reference: Investment News (Oct. 22, 2019) “4 ways to help clients control their digital afterlife”