By John Drachman
Pop quiz. When was the last time you thought about who would get access to your most critical asset information and financial records if you were suddenly incapacitated? If your answer is “never,” Joe Henderson, a Minneapolis estate lawyer, wants you to know he has seen too many cases of critical documents left “in a desk drawer, hoping the right person will find them at the right time.” All too often bank accounts and safe deposit box contents go unclaimed, Mr. Henderson said, “because their heirs didn’t even know they existed.”
Practically every investment or planning activity we engage in creates a paper trail – a record – representing a substantial digital asset to ourselves and our heirs.
Unfortunately, heirs can be locked out of other electronic records with monetary value, such as cryptocurrency accounts and frequent flyer miles. Basic tasks left for an estate to manage; such as paying bills online or canceling subscriptions, may be impossible to administer if arrangements have not been made to relay secure records to those who need them most.
“There would be no way for someone to know how I pay bills unless they could access my online account and my emails,” says Abby Schneiderman, co-founder of Everplans, a site for creating end-of-life plans and storing documents. “And if it takes you a while to access these accounts, you’re going to realize afterwards, ‘Well, we’ve lost thousands of dollars on services we don’t use or don’t need anymore, because we can’t access them.’”
For those nervous about putting sensitive documents online, The Torch sidesteps sensitive personal information like account numbers. Instead, it lets you name two or more people who can be informed which documents of yours are most important and where they can be found.
Making a digital assets inventory is the logical place to begin. The Society of Trust and Estate Practitioners published a convenient worksheet that will help you get organized. Include any computers, servers, handheld devices, websites or other places where your digital assets and records are stored.
Keep your inventory in a safe place. Remember, you don’t want to include sensitive information such as passwords in your will, since that document becomes public after you die. Store letters of instructions and inventory information with your other estate planning documents in a secure location. Many utilize a home safe, an attorney or executor.
Want More Security?
Beyond the basics, many are turning to digital vaults for data storage involving firewalls, encryption and access control solutions. While digital vaults are designed essentially for businesses, a growing number of individuals are opting to use these encryption solutions also to manage, share or deliver their information securely. Firms offering vault services include Cyberark, IBM, Futurevault, Oracle, Hitachi, Micro Focus, Fiserv, The Carlyle Group (Veritas), Microsoft and Johnson Controls to name just a few.
The Bottom Line
Where your digital assets are concerned, consider bringing a professional into the picture. Start by talking to your advisor about strategies for ensuring your heirs will gain access to your digital assets in the event something happens to you. Many advisors work with teams of experts that provide complementary estate planning and executorship skills before necessity calls.
John Drachman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. John is an IABC award-winning writer, who applies his 30 years of financial marketing experience toward advancing the dialog between investors and investment professionals.