Planners often have to work through a matrix of confidential user IDs, passwords and various other encryption measures to get at information that deceased benefactors kept secret.
Estate planners are confronting issues related to the ownership, transfer and disposition of this type of information and are encouraging clients to grant family members rights to the information to avoid complications after death.
“It’s very important for the advisor to raise the issue of digital assets with clients because most people are not thinking about all the ways in which they operate digitally in this world,” said Sharon Klein, managing director of family office services and wealth strategies at Wilmington Trust. “Even older people who don’t indulge in the new technologies like the new generation have a lot of digital assets.”
People need to be aware of how they want these assets handled after their death, and to designate a beneficiary of the assets if they have any value, Klein said.
“With e-mail and social media and other types of accounts, you need to ask someone what their wishes are in that regard after they die,” she said.
Klein offered several best practices that can ensure a client’s digital assets are appropriately dealt with after death:
First, it’s important to have an inventory of all digital assets, from social media and e-mail accounts to anything else that might be stored in digital form, and to have an updated list of the user IDs and passwords, as these tend to change frequently.
“If you have a great list, but the list isn’t updated with that unique sign-in information, nobody’s going to be able to access it,” she said. The updated list should be stored in a safe place—backed up on a CD and on paper—and given to a trusted advisor or given in digital form to an online storage provider.
Moreover, Klein said, if a digital provider offers a mechanism to facilitate access after death or delete an account, the client should take advantage of it because there is no uniform way of dealing with these issues across providers. The Google inactive account manager, for example, allows the user to designate a trusted contact that will receive notice after a given period that the account has become inactive. In addition, the owner of the account can decide whether all or some of the information is sent to that contact or a different one. The owner can also select to have none of it sent out, in which case the account would be deleted and the contact notified that the account is inactive.
Another issue involves terms of service agreements clients may have entered into with individual providers by clicking “I agree”—often without reading the stipulations—when opening an account. These usually govern what happens to an account when the owner dies. Klein noted that some agreements say that the account terminates on death and all the data is deleted.
If a client has an agreement like that and wants benefactors to have access to the accounts after death, she said, he should name someone an authorized account user in his will. This will help avoid conflicts with federal and state laws that prohibit unauthorized access to computers.
Some digital assets, such as a domain name or a blog with advertising on it, could have significant value, Klein said. These can be included in a will as part of personal property, just like a car collection, for example.