I have to admire our Uncle Jim, who refuses to reply to text messages. At a recent luncheon, we were explaining to him that if he joined the 21st century he could download an app for all types of things. His reply, in all seriousness: “My app? My appetite is just fine.”
Even for those who, like Uncle Jim, have maintained a somewhat old-fashioned technological lifestyle, the fact remains that we live in a digital world. You know that “lost” feeling when you forget your cell phone? Unless you’re intentionally on a tech-free vacation, functioning without our computers, iPads, and cell phones can be downright impossible. Somewhat sad, but true. In today’s world, we are all about speed and convenience.
In the past decade alone, it’s astounding to reflect on how our daily living has been affected by technological advances. As an estate planning attorney, I’ve seen the pros and the cons of this up close and personal. Credit card companies, banks, financial firms, and just about all other vendors are quick to recommend online statements. Saves time and money, right? However, this savings, while nice, may create extra cost down the road when your executor has to re-open your estate because an asset was missed.
When I first started practicing law, the typical advice to executors assisting with the estate of a loved one was to forward the decedent’s mail and watch the statements and letters roll in. The monthly or quarterly statements sent via mail alert the executor to assets, accounts, and debts of the decedent. However, with the shift to digital living, many people no longer receive “snail mail,” and opt instead for online statements and communication. As a result, it’s imperative to keep a list of all online log-ins and passwords. A good practice is to update your online accounts on an annual basis. Perhaps you do this every year when you send out your holiday cards, begin the new year, or send in your taxes.
In addition, it does your executor or loved ones no good to have a list of passwords if they don’t know that it exists or where it is. Therefore, be sure to communicate to those close to you where the list is kept. At the very least, keep the list with your Last Will and Testament.
Further, don’t forget those assets which are strictly stored on digital devices. According to a 2013 McAfee study, the average person has roughly $35,000 worth of assets stored on digital devices. This includes, among other things, purchased movies, books, music, and games, as well as personal memories, photos, communications, personal records, hobbies, and career information. Surprisingly, of those surveyed in the study, 55 percent confirmed they store assets which would be impossible to recreate, re-download, or repurchase.
Along with your annual list of log-ins and passwords, be sure to document your digital assets, accounts, and subscriptions. In a February 2013 publication, Consumer Reports maintained there was approximately $1 billion in life insurance proceeds waiting to be claimed by beneficiaries.
There are initiatives underway to make digital assets easier to deal with, but lawmaking is inevitably at a state of reacting and trying to keep up with the impact our online, digital advancements have upon us. In the meantime, it’s important to maintain a list of your digital assets.
Also, be specific in your durable power of attorney and in your Last Will and Testament or Trust. Have provisions in place to allow your agents or beneficiary to deal with these assets upon your incapacity and after your death. Although a somewhat dramatic example, consider the recent, polarizing debate regarding whether Apple should be forced to unlock a phone to help the FBI investigating a terrorist. Technology has great power, but can also pose real problems.
The takeaways – for the majority of you who seek time and convenience and are skimming this article: (1) make a list of digital assets, log-ins, and passwords; (2) communicate where the list is located; (3) maintain/update the list at least annually; and (4) give your agents in your financial power of attorney and Last Will and Testament the power to handle your digital assets.
The information contained herein is for informational purposes only, and is not legal advice or a substitute for legal counsel. You should not act or rely on any information herein.