If you don’t know what digital assets you have, or what rules will apply to them when you are suddenly no longer capable of managing those assets, or what will happen to those assets when you die, it makes it extremely difficult, if not impossible to plan properly. Furthermore, you don’t want a lack of security, or a lack of planning to result in a major headache for your clients or their beneficiaries.
Digital assets can include domain names, personal and business email accounts, social media accounts, blogs, digital photos, music, videos, medical records, tax returns, online bank and brokerage accounts, bitcoin accounts, frequent flyer miles, and Paypal accounts. Then there are computers, backup drives, and online storage services where a lot of this information is stored. Every single one of those services and storage locations have different user names and passwords (if they don’t, they should!), different terms of service and privacy policies, and even Federal and State laws that govern access.
Typical questions and issues that arise are some of the following:
- Do clients have a plan for what should happen to their digital assets in the event of their incapacity or demise?
- What can an Executor or personal representative access? What are the risks of doing so? How can they even gain access to the necessary devices?
- What if a device is protected by a fingerprint scanner?
- What happens to all of the family photos stored online?
- How do online terms of service affect who can access and under what circumstances?
- Will everything stored online get wiped out?
- Will the chosen representative have access to business accounts, personal accounts?
- What about accounts that people want to keep secret? What if they only want certain people to know of certain accounts and not others?
- Who should they appoint to access their accounts?
- What’s the best way to store and provide usernames and passwords? How do you prevent that information from getting into the wrong hands?
- What do you do whenever you change usernames and passwords, or add or remove online accounts?
- Should they use a Power of Attorney for access?
- How can they protect against identity theft?
- Should they use a safety deposit box?
- Should they use an online storage service or backup to a hard drive?
Do you know anyone, or have any clients who conduct all of their business online? What about a business that receives all of its orders via email? What about a business that receives all of its bills via email? What would happen if suddenly no one had access the business email account? Or pricing sheets kept in an online file sharing service? Where will all the costumers go if their inquiries are consistently ignored?
So what can you do to avoid the headaches? Implement a proper Digital Asset Plan that does the following:
- Inventory every single one of your online assets
- Know what the rules are for every service and account that use
- Decide where and how to warehouse your online assets and account information
- Decide who gets access to what
- Don’t ignore security and common sense
- The first step is to inventory every single one of your online assets. Knowing what those assets are and how to access them, will then determine what rules are in play in the event that someone else needs to obtain access to your devices and online accounts. All of that information also needs to be updated on a regular basis when accounts are added and removed, or access information has changed.
- State laws are inconsistent, and in most cases, even non-existent. Then there are Federal laws that govern unauthorized access, and of course, all of those “click-through” policies that nearly everyone accepts, but almost never reads, that bind you to the online service Terms of Service. Some online services allow you to share your information, others specifically prohibit it. Some may allow representatives to access your accounts, and some may be completely silent on the subject. Knowing the terms of the Terms of Service you are subject to can make a huge difference. For some forms of online assets, it may not matter to you that much, but for others, the fine print can be critical. Do you know the relevant terms of the Terms of Service for every online account that you use? Do your clients?
- And just because you know where everything is, it doesn’t necessarily translate into your designated agent knowing where everything is. Knowing where to keep all of this information, and deciding who can access it, is no less important than conducting your inventory. There are pros and cons to nearly option. Some are physical, some are online, and some are even a little old fashioned, but what option to take is dependent on the unique circumstances of the individual or business.
- Once you’ve done your inventory, reviewed all the applicable rules, and figured out where to keep everything, you need to figure out who gets to see and control what assets. Should your Digital Representative be the same as your Executor or Trustee? Your kids? Your Spouse? Your business partner? Some combination of these people, or someone else altogether? And by what mechanism will they get the access you want them to have?
- Simply leaving your computer to your wife or your business partner, is rife with problems. Does that mean just the physical computer? Everything that’s on it? Only some things on it and not others? And what about the other stuff that you don’t want that person to access? Should the data be destroyed and by whom?
Some of your clients may also have digital assets with a lot of intrinsic value – online business, web domain names, bitcoin accounts, professional photographs, books, etc., and they can all be extremely valuable.
Just because assets are digital and not physical, it doesn’t mean that they shouldn’t be properly covered.
Last, but certainly not least, is the need to protect your digital assets and online accounts. All of that ubiquity comes at a price. There are numerous ways your online and financial life can be compromised by a lack of security and common sense. Unfortunately, identity theft and hacking are realities of every-day life, as the recent hacking of Yahoo demonstrates. Use a firewall, a password manager, encryption, and an anti-virus program, and never store your credit card information, or usernames and passwords in your web browser. You should also make it a habit to close your web browser, and eliminate your web history every time you log out of one of your online accounts.
If you are interested in planning ahead with a proper Digital Asset Plan, please contact me for more details.