By Iris Buczkowski
In an increasingly digital world, it seems that one area people have overlooked is the protection of their digital assets. Granted, when you think of protection and planning this is not necessarily the first thing that would come to the top of your mind. Yes, we all know the importance of unique passwords and how much more increasingly important it is to be aware of cyber-attacks, but how do you actually protect these assets if you are incapacitated or you die?
The average person today is reported to have an average of 25 different online logins. Some of these can be basic such as access to view online bank information, but others can be more critical to your wealth planning because they are assets that generate a source of income for you. Digital assets are defined as all of the electronic data that may be stored on a computer, phone, tablet, external hard drive, or remotely in the cloud. They include user accounts associated with online services, virtual or digital currency that has some measurement of value, to include credit card rewards and frequent flier miles, domain names that you may use for business or a personal blog, and intellectual property rights such as copyrights and patents associated with any of your digital assets. These sources do not automatically cease to exist if you do so how do you ensure your estate accounts for an receives what it is entitled to if you are no longer here?
First it is important to have an inventory of everything in your possession – your passwords, the websites you need to access to retrieve the information, account numbers – and find a reputable service to hold this information such as Keeper or another password and account information vault service. Secondly, it is important to have your named fiduciaries be able to access this information in the event you are unable to. Who are your named fiduciaries you may be thinking? The people you name to carry out your affairs in the event you cannot. This includes your power of attorney, executor/executrix, trustees, or in some cases even your business partners or other people you share ownership of an asset with. This leads to the point that if you have not established an estate plan to outline your plan, you need to visit with an attorney ASAP. It is equally important to make sure the attorney that you work with includes language in your documents to address your digital assets in your estate plan. Ultimately you want to be clear about your instructions and make sure the people you trust to act on them have the information they need to so.
Why is this so important? Failing to plan for the ultimate disposition of digital assets places extra burden on your fiduciaries, but also increases the risk of your fiduciary not being able to gain access to the assets. The longer it takes to access digital assets the more difficult it can become over time. Think about how many times we are prompted to create new passwords for online accounts after a specific number of days, and how it requires the current password for you to be able to create a new password. Keep your inventory current and make sure someone you trust knows where to find it. The longer it takes to access your assets the higher risk you are at for identity theft or asset erosion. In addition to working with your attorney, be sure to include your financial advisor because protecting these assets is the fastest changing and most complex areas of wealth planning today. Staying on top of changes and how it may impact you or your heirs is critical to protecting your information and your online wealth.