A Will for your Avatar: Estate Planning for Digital Assets
When obtaining an estate plan, people generally have the goal of passing their real and personal property in an orderly way according to their wishes. However, as the world’s business and activities are increasingly conducted electronically, people generally neglect to form a plan to deal with some of the assets they use most on a daily basis: digital assets and accounts.
Personal representatives handling decedents’ estates have been confronted with the difficult problem of having insufficient information and access to important accounts and passwords, such as online bank accounts, bills set on automatic pay, e-mail data and contacts, and social media accounts. This issue especially affects banks, where the goal of providing smooth and simple account transition between a decedent and a joint owner or beneficiary is sometimes at odds with laws and regulations concerning privacy and confidentiality.
As this problem has become more widespread, the Uniform Law Commission has started to develop a model set of laws that states will be able to adopt to deal with this problem. However, without this model law in effect, estate planning attorneys and information technology professionals have devised a number of solutions to deal with the sometimes uncomfortable issue of granting passwords to personal representatives after a decedent’s death or to an attorney-in-fact during a principal’s incapacity, while maintaining sufficient privacy during life. Banking customers planning for end-of-life transition of accounts would be prudent to consider these ideas, not only for their online bank and financial accounts, but for their entire digital profile.
Recommendation #1: Create an Inventory of Online Accounts and Passwords and Store the Document in a Safe Place
The first recommendation to help people manage digital assets after death is for a person to go through all of their online accounts, including their bank accounts, e-mail, social media, retirement accounts, and services with automatic pay established, and to write down their log-in information and passwords. A person should not store this information on their computer, in case the computer is hacked or stolen. Instead, this information should be stored in a safe but accessible place, such as in a safety deposit box or with a very trusted person. Upon that person’s death or incapacity, this list of passwords can be used to access important accounts, terminate services no longer needed, transfer assets to beneficiaries, and settle an estate.
Recommendation #2: Establish a Social Media or Digital Asset Will
The second recommendation is for a person to create an inventory of accounts and passwords as provided for in recommendation #1, but then take extra steps by providing specific instructions on how a personal representative should use the information provided and analyzing the terms and policies of each account and website. The United States General Services Administration has recommended that people establish these Wills, generally referring to these documents as a “Social Media Will” or a “Digital Asset Will.” To establish a Social Media Will, a person should:
- Document their online accounts and passwords and place this document in a private but accessible location.
- Appoint an online personal representative or executor to handle the Will after the person’s death.
- State how their directives on how the personal representative should handle their online accounts after death. However, this specific consideration is more important for social media and e-mail rather than financial accounts, where the main concern is allowing a person to have access to accounts to handle an estate.
- For the account owner’s protection, place a condition in the Will requiring presentation of a death certificate for a personal representative to take actions; and
- Review the privacy terms and policies of each website to see if specific steps should be taken for different websites or accounts.
Recommendation #3: Enroll in an Online Service
Finally, a number of companies provide services that manage online accounts and passwords. Two common services are SecureSafe and Legacy Locker, which generally and automatically take similar steps as recommended in the above. SecureSafe provides a free service for fifty passwords and one beneficiary and an unlimited service for $13 per month. Legacy Locker provides a free limited account or a paid account for $30 per month or $300 for life. With any online service where passwords are stored, a person should research whether such a website has sufficient security.
Similar to other estate planning techniques, this type of planning can save loved ones from unnecessary expenditures, time and legal expenses, and headaches.
With any online service where passwords are stored, a person should research whether such a website has sufficient security.