Saturday, November 18th, 2017

Estate Planning In The Digital Age

May 24, 2014 by  
Filed under Estate Planning

The rapid onset of digital everything means that many people have wills that may be out of date.  Whereas traditional will planning dealt mostly with hard assets, an increasing portion of handling an estate deals with digital assets such as online accounts, online assets or even online businesses.

I know that if I died, there would be many password protected websites, subscriptions, banking, social networking and business related sites to be dealt with.  A problem is that many online account providers may have account agreements that are not able to handle delegated responsibilities.  I understand that PayPal will transfer assets to an estate but will not do so in case of incapacity. Only a power of attorney can deal with the account in cases of incapacity, and it is best if the power of attorney document makes specific reference to digital accounts.

A similar problem can exist for email accounts, where an executor or power of attorney may want to gain control over the history an operation of an account, but may be rebuffed by an account provider over privacy concerns.

An executor may even have a great challenge just figuring out what types of accounts exist, since there may be no paperwork to identify accounts.  Clearly, it is best for you to have a list of account user names, passwords and web addresses where all your accounts can be found, and to keep this up to date.  The risk in this case is that the comprehensive list could provide a terrific risk for identity theft, so this list should be kept very secure.  Such security may be accomplished through encryption such as is provided by some software providers, or even through an old fashioned safe deposit box.  In any case, it is critical that another person of your choosing be able to access the information when the need arises – don’t make it so secure that no one of Earth can access it!

An interesting possibility is to name a digital executor separately from the regular executor.  The digital executor can be someone who is tech savvy and can report back to the principal executor or may be asked to do independent work in some areas.

For the benefit of clients I have created a shared, online spreadsheet through Google Drive that enables clients to share the document with me or with the executor, so that information can be kept up to date and accessible by critical people when it is needed.  I have another worksheet that I use to help clients who serve as executors to assist in identifying and documenting progress in all the tasks an executor may need to do.  Again, this document can be shared in real time between the executor, financial advisor and lawyer, so everyone can see what needs to be done and has been done, keeping progress notes along the way.  I have already found it to be a very powerful benefit for clients during a time of severe potential stress.

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