The recent cyberattack on the pipeline facility in Texas seems to be an appropriate lead-in to remind individuals about a potential digital issue. I hope that you are diligent about protecting your computer, your phone, and other electronic devices. Are you diligent about backing up data in case you have a hard drive crash, or if something like the Texas issue occurs and you get the ransomware virus? The Texas plant having a complete backup of their system allowed them to get back online and up and running. Without that backup, they would have had to pay the cyberattackers to gain access to their data or have had to start from scratch and reprogram computers. What would happen right now if you could no longer access what was on your computer because someone else has control of it?
While many are not concerned about being the target of hackers, everyone should be concerned about – what would happen to your digital assets and digital information if you were to pass away or become incapacitated tomorrow?
First – what are digital assets? If you are in business, this would include any website you own. If you write a blog or are a podcaster, these are digital assets. Some of you may have seen the online piece of art that was auctioned for over $6 million a few weeks ago. This piece of art is a digital asset. If you have done any e-art, written an e-book, or written papers published online, these are all digital assets. The newest digital asset class today is cryptocurrency.
In addition to digital assets, consider all your digital information. How many passwords do you have? Many of us have a dozen or more – and some must be changed every 60 or 90 days. With 2 step authentications, even if your spouse knows the password, will they be able to get into the account? Consider if the person handling your financial affairs – your power of attorney because you are incapacitated, your executor(trix) because you are deceased, or your significant other would know the answers to or be able to access:
- What bills are you receiving online, and which bills are you getting a paper statement?
- What bills are you paying online?
- Which bills are automatically being paid, and which bills are you initiating the online payments?
- What subscription services do you have, and how often are they paid?
- How are you accessing your bank, credit card, and loan statements?
- What income sources are deposited into bank or investment accounts – pensions, Social Security, investment income, rents, royalties, wages, etc.?
- How do you access your employer retirement account statements – 401(k)s, 403(b)s, 457, SEP and SIMPLE IRAs, etc.?
- How do you access your other investment statements – Traditional or Roth IRAs, individual stocks, brokerage accounts, etc.?
Think for a moment about all the activity going through your bank accounts – could the person who needs access to that information get to it if you were unable to explain it to them? Frequently, we find ourselves working with clients trying to manage financial affairs for the first time because their spouse “always did it” or a child trying to settle an estate because their parent passed away. Countless hours can be spent analyzing bank accounts, tax returns, and other documents trying to piece together the deceased person’s financial life.
Even if a person has not passed away, does a caregiver have the legal authority to access digital information if you become incapacitated? How many of us have called a utility or insurance company to try and resolve a problem only to be told our name is not on the account and they cannot help us? If you suddenly could not handle your day-to-day affairs, how easy would it be for someone to step in and manage those for you?
Digital information may be something other than financial. Increasingly, individuals are using cloud storage services or their computer’s hard drive for data storage. Can someone else access these documents if necessary? Does the person who is handling your affairs know where you keep your password list? What is stored either on your computer or in the cloud that access might be required by someone else? Some examples:
- Family photos or videos
- Family history – did you do your family’s genealogy? Medical history?
- Estate planning documents – power of attorney, wills, trust documents, etc.
- Writings, art work, or other intangible documents
What about your online accounts that are not financial? If you were to pass away or become incapacitated, do you have accounts that you would want to shut down?
- Facebook, LinkedIn, Twitter, Snapchat, Instagram – do you want these and other social media accounts closed?
- What about online dating sites? Do you need your profile removed?
- Online accounts where you have purchased items like Amazon, Walmart, Chewy, and hundreds more storing your credit card information may need to be closed out to avoid illegal activity.
- Online entertainment accounts – video gaming, gambling, and streaming accounts
- Portals for communication with medical offices
We have become a digital world – whether we entered it willingly or have been dragged into it by outside forces, we have information that is available only online. The key is making sure those that are taking over these roles when you are no longer able to either because of incapacitation or death:
- Understand what information was being handled online
- Have access to that online information
- Know what your wishes are regarding that information now that you no longer are managing it
Certainly, a start to this is making sure you have named a power of attorney and executor(trix). Make sure these documents include language about your digital accounts or assets. These documents should give someone the authority to access, control, use, or deactivate accounts or assets. This tells the provider of your digital account that this person has my permission to access that account. The person managing your affairs can print paper copies, transfer the account to someone else, or close it out.
A second step – inventory all accounts and maintain a list of current logins and passwords. This is a step that you need to repeat regularly. Many of us have created the initial list. It needs to become part of your routine to update when you pay bills, reconcile your bank account or some other trigger.
Be careful about where you keep that list of login and password information. If you keep it on your computer, can they get access to that list? What is that list called? Hopefully, it is not called passwords.doc – that is a concern if your computer were to get hacked or stolen. If you are going to keep a password chart, name it such that the average person would not know what it is, and make sure the individuals who need to know do know the name of that file. Make sure a list of passwords exists, is safe and is kept up-to-date.
A third step – write out instructions of what you want to happen to your various digital accounts. Do they need to be transferred to someone? There are probably several accounts you want to be deleted or set for no changes to be made to them. Online institutions like Google and Facebook have written policies on what individuals can do with a deceased or incapacitated person’s accounts. Include where to access these instructions if appropriate.
A little advanced planning & organization can go a long way towards protecting and preserving your assets. It gives someone insight as to how you managed your financial responsibilities and where to access them. Everyone knows we at Planning with Purpose have been working on getting your houses cleaned out with our annual Mom’s House garage sale and ability to shred documents. Many of you have received or will receive our Trolley binder to gather important information in one place. This is the next step – getting your digital presence in order – just in case.