Estate Planning in a Digital World

Everything these days is connected to the digital world which will outlive all of us. Because of this, it is important that your executor have access to your digital information to efficiently and thoroughly administer your estate. Unlike the old days when paper statements were mailed monthly to your house,  your financial data is secured behind passwords and firewalls.  Here are the steps you should take now to open the door for those who follow.

Make an inventory

Choose a format that works for you such as Word, Excel or an old fashioned pen and tablet. Inventory all of your online accounts. The list must be comprehensive, updated as needed and kept in a secure place but one that has easy access.  Be sure the information is accurate and complete to allow access after your death or incapacity.  I recommend using a real test by logging on using the information from your inventory to be sure information is up-to-date and recorded accurately.  Remember, shortcuts and abbreviations which are clear to you may not be clear to your executor.  Business or professional assets should be kept separate or so noted.

What to include

Imagine that you get a message from a friend saying, “Help. I need my account number.” Your executor faces a similar situation without the ability to ask you questions.  What else would they need?  These are the essential bits: Location of information (desktop, laptop, tablet, and phone), password to get in the device, name of software program, another password (user name, pin number and so forth), name of bank or investment company that holds the account, account name, account password.  Again, I would suggest a dry run using only the information in your inventory or, even better, ask a trusted individual to log in using only the information you have recorded in your inventory.

Organization

Organization is key to understanding your digital assets. The logical starting point is the hardware. What is it (desktop, Dell laptop)? Where is it located (den in my house)? What is the password, if needed, to gain access?  You should keep record of which programs hold your financial data (Quicken, Word, Excel), the log-in information (username, password, pin number and answers to security questions), the content (checking account, credit cards, etc.), and the company (Best Bank, Fidelity, Citi credit card) account number and password.  Remember the trend towards increased security means more institutions text or call a special code to enter their website.  Be sure you include your smartphone password in your inventory so your executor can gain access to that special code!

Type of information

Your inventory should include information as outlined above for any of the following for which you have digital access: Banks, investment companies, retirement accounts, insurance, credit cards, automatic deposits, automatic payments, automatic renewals (software subscriptions, magazines), social media (Facebook, LinkedIn, Twitter), email accounts, backup service and service contracts.

Where to safely store

This is the most difficult question without any perfect or near perfect solution. Printing your passwords and storing in a bank safe deposit box is the most secure.  Each subsequent change will require a trip to the bank.  Your executor can get into the safe deposit box following your death.  In the event of your incapacity, you will need a properly drafted and executed Power of Attorney before the bank will allow them access.  A home safe is an option.  An alternative option is to give a copy to your executor, now.  Be certain this person is not only trustworthy but also discreet.  Do not put your name or other identification on the paper should it be lost, misplaced, or left out in the open.  Yet another option is to give it to your lawyer to keep with the rest of your estate planning documents.

In summary, to properly take care of business you need an accurate and carefully drafted inventory of your digital assets. Once drafted, store your inventory in a secure place where your executor can gain access when needed.  This will make your executor’s job more efficient and  you will be less likely to lose resources in this digital world.

Stuart T. Shmookler chairs Gross McGinley’s Wills, Trusts, & Estates Group. His practice focuses on estate planning, elder law, and trusts as well as providing counsel to small and family-owned businesses.