Digital Assets: Salvaging your legacy for eternity

September 2016 View more

When we cruise social media, inspect our financial statements and take or organize photos on our devices or desktop, we assume we’re protected from malicious digital intruders. The sad reality is that the same firewalls that guard our personal data can prevent a friend or family member from getting into those digital troves to salvage our legacy in the event of our untimely death.

Digital Domain

Everything in our digital library—from records of online stock trades to a Pinterest collection of potato salad recipes—is part of a modern-day financial estate plan.

When Elizabeth Digani Sheehan, a financial advisor at UBS, works with her clients on annual financial plans she always encourages them to review physical and digital assets.

“The majority of times, clients have not thought about the digital assets,” she said.

Digital assets can include personal finance accounts, awards programs such as frequent flier miles, photos, social media accounts and passwords for phones, online accounts and blogs.

If you think it will be easy for someone to access those accounts on your behalf, consider the case of a Canadian woman who had to get a court order to retrieve her dead husband’s password so she could enjoy games they purchased on an iPad, according to a CBC News report.

Rules For Access

That might be an extreme example, but remember that each entity—from Google to your local bank—will have its own rules for access, and finding those accounts as well as trying to get the passwords will be an added hassle for your already suffering family and friends.

“Planning well ahead of an illness helps make a very stressful time a bit less stressful,” Sheehan said.

Securing Your Digital Assets

Some tips for securing your digital assets ahead of time:

• Take an inventory: Admit it. You probably can’t remember all the loyalty programs, social media platforms and digital accounts you have, never mind the passwords. Pick a day to take stock, and close the ones that are no longer useful. This might also be time to do something with the library of photos on your desktop and phone—such as backing them up or printing them out.

• Tie digital assets to your long-term plans: During your annual check-in with a financial planner, discuss digital assets and then make sure your spouse and/or family members know the extent of your accounts, Sheehan said. “In addition, work with your estate planning attorney to develop a digital assets clause, which grants executor or trustee access to all digital accounts, electronically stored info and social media,” Sheehan said.

• Create a life document binder: “It’s exactly what it sounds like,” Sheehan said. It could include financial information, phone numbers and emails for family members and advisors, burial plot details, websites and passwords. She recommends storing it in a safe deposit box and making sure family members know the box exists and where the key is stored.

When an individual or family takes these steps well in advance, it can bring to light information family members probably ought to know already. For example, one couple Sheehan worked with was unequal on its financial knowledge—the husband took care of investments and his wife was unaware of all the accounts they had. Once planning was complete, she was thrilled to receive the life document binder and now has a clear view of family finances.

Sheehan took her own planning advice to heart when she and her husband consulted with an estate attorney shortly after their honeymoon.

“It was not the most romantic thing in the world,” she said. “But I’ve seen all too closely what can happen when you’re not well organized and I didn’t want it to happen with me and my family. It’s easier to do when it’s clearly off the radar.”