Published in the Sept-Oct 2012 issue of MyLIFE magazine
We’re all familiar with the idea of estate planning. It’s reassuring to know that when you pass on or become incapacitated, your possessions will be passed down to those closest to you, be it family or friends, who will preserve your memory through your belongings.
However, estate planning in the 21st century has given rise to a new set of challenges. We’re no longer just faced with what to do with our physical belongings, but also what is to be done with our digital assets. Music, photos, books, emails, documents and other forms of digital possessions now need to be as meticulously cataloged and evaluated as your fine china or collection of baseball cards.
It would be easy to name your tech-savvy son or nephew get the home computer, but what about the files on the computer? How do you put a value on your digital assets? Digital devices might contain stories, digital art, photography or a best-selling novel. Making sure that digital assets are evaluated alongside physical ones is very important.
Our world is becoming more and more digital each day. Important names and numbers are no longer stored in a little black book, but on your phone. Families are no longer keeping physical photo albums, but groups of digital photos. Taxes, receipts, essays, the novel you started and swore you would finish—all digital—all backed up to the “cloud.”
As we make progress in technology, we also make progress in medicine and health. People are living longer. We now live in an age where it’s not uncommon for the parent to naturally outlive the child. We often assume that we will always be there to take care of our aging parents or close relatives. But what if we’re not? What plans do you have in place in case no one is there to take care of you? Or your widowed Aunt Christine? Or the family pet?
Patricia Stalzer of Harris Private Bank offers some insights and solutions to a growing problem. “We need to think beyond going into someone’s home, the cabinets, books or the kitchen,” she said. “Now we have to take on this new aspect of estate planning.”
But even if friends and family do think to check for digital assets, they can’t always gain access. If you don’t have the username and password of an online backup service or email account, you might not be able to get it, even with a death certificate.
“Services for online digital storage are popping up—cloud services. But some of these accounts are nontransferable.” explained Stalzer. “When you sign up for, say, an email account online, sometimes in the user agreement we sign off on, it says the account is nontransferable.”
BMO Financial Group is also trying to raise awareness of this issue. “A spouse or heirs may not have access to the passwords for online bank and investment accounts,” the company explained. “In the case of incapacity, they may not even know about the existence of stock options that are about to expire.” Obviously, this could lead to a major loss of financial assets that the deceased worked hard to build.
Both Patricia Stalzer and BMO recommend that people should take a digital inventory. “People in their 30s and 40s are good with technology. They probably have some sort of digital storage, Facebook, online bill pay, etc. However, with the older age group it gets more difficult. The 60 to 70 age group might have Facebook and online bill pay but little else.” said Stalzer. “Start with a more informal approach. Simply writing down usernames and passwords is a good start. Then move to something more formal. Get a power of attorney, then name people formally who will handle your digital assets.” You can find small notebooks specifically designed to hold account names and passwords online or in the office supply section of your local big-box retailer for about $10.
Starting your estate plan can seem very daunting, but starting with the right tools, such as a written list of important files or documents and where they are, is a great start … and moving on to a list of account names and passwords is even better. If you’d rather use professional help, enlist the services of an attorney or estate planner. Once your assets have been cataloged and evaluated, a bank, such as Harris Private Bank, can step in to facilitate the wishes of the deceased for about 1 percent of the value of the assets annually. Your bank’s fee might be different, so be sure to ask before getting started.