Those of us who are planners go to some length to set up wills, powers of attorney, and other estate planning documents to protect ourselves, our loved ones and our assets for a time of disability or death. In our increasingly online society, we also need to consider what happens to a variety of assets we own, that might not show up on paper or in the mail after we finally breathe our last. Daily Money Managers (DMMs) often serve as powers of attorney or as executors, and become intimately involved in the closing of estates when a client passes. Online assets have not usually been much of a factor for the elderly in the past, but that is changing rapidly. If you are reading this, you probably have a zillion online accounts! Chances are good that you have money or something of value that only “exists” online. To prevent these assets from being lost to your heirs, you should follow these basic tips that are part of our system that we use with clients.
- Use a Password Manager.
A password manager is a software application that notices when you create a new account or change a password. It then saves the sight in an encrypted vault, and lets you access all of your passwords while only having to remember one. KeePass, LastPass, and Dashlane are examples that you might want to check out.
Not only does a password manager increase security by fostering the use of unique, strong passwords, it gives you a single place to keep all of your online life documented and up to date. This is invaluable for the person you appoint to do the clean-up after you die, or if you become incapacitated. You might not want to share the key to the castle just yet, but you can store your password vault access information with your attorney or somewhere very secure but not unfindable. With some software, you can even grant online access to others. This can go horribly wrong in the case of divorce or greedy children, so be cautious.
- List your online accounts.
To access an online account, your digital executor is going to need to know what accounts you have, the domain name, the user login & password, and the answers to your security questions if they access the account from an unregistered computer. They may also need access to your cell phone if two-step authentication is in use! In a list of accounts, you should specify who should have access to the account, and what you would like to have happen to the account after your death. This can include things like archive, delete, erase, or transfer to someone specific.
Digital assets are not always the things we think of like bank accounts and investments. You might have photos stored online, an extensive music library, credit balances on any account, PayPal cash, BitCoin money, a valuable domain name, business accounts, software or other royalty accounts, manuscripts, and so forth. If you own a company and have intellectual or other assets stored on an employee’s computer, it can get even more complicated. Your online password vault makes it easy to store information for each account and even to print a list if that is needed.
- Understand your state’s laws.
All of this is so new that the legality of accessing and managing the digital life of the deceased is a body of law that is in flux. With the grim statistics on Elder Financial Abuse, online access is an area of concern, both before and after death. The Uniform Fiduciary Access to Digital Assets Act is marching its way to state-by-state acceptance, with about half of all states adopting or considering it at this point in time. Individual states have their own laws as well. Granting access to your digital afterlife is a legal matter and should be reviewed with your attorney as part of your estate plan.
Within a relatively short span of time, there will be very few people who don’t have at least an email account that will need to be shut down when they die. No matter what legislation occurs, someone will need the knowledge and authority to manage your online affairs if you become incapacitated or die. Those who effectively use Daily Money Managers to handle their affairs while living, will have a leg up because they have a trustworthy second (or third) party already involved in many of the everyday financial details of their lives. But without a comprehensive list that is kept up-to-date, some of your money could be for nothing.