An estate plan typically focuses on your financial assets and your healthcare wishes. But most of us have a digital footprint these days, and traditional estate planning documents rarely address what to do with our online lives – the photos, accounts, files, data, and assets that make up our digital footprint.
In 2015, the Uniform Law Commission created guidelines known as the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). Quite a mouthful! Since that time, most states have adopted some version of these guidelines. In short, this gives someone (typically your executor) the right to manage and dispose of your digital life after you die.
RUFADAA says that if your estate planning documents explicitly grant a fiduciary (such as your executor) access, then that person can access and manage your accounts regardless of the terms of service for the account. The process for obtaining access to digital assets is similar to the process for other assets since you must provide supporting documents such as a death certificate and letter of testamentary.
Why Should I Create a Digital Estate Plan?
While the guidelines give your executor authority, they may not know what you have, or where to begin. A digital estate plan will ensure your online accounts and digital assets are handled the way you want when you die.
By creating a digital estate plan, you can help your family more easily:
- Locate any accounts you have online
- Locate documents stored electronically, on hard drives, or in the cloud
- Access those accounts or the information in those accounts
- Determine if your digital property has any financial value that needs to be reported and perhaps submitted to probate
- Distribute or transfer any digital assets to the appropriate parties
- Manage or shut down any accounts
- Avoid online identity theft
Create a Digital Account Inventory
First, create a list of both the hardware and software you use to store documents. This is simply a list of your existing devices (cellphones, tablets, PCs, etc.), as well as any online storage plans where you back up the data for those devices.
Next, create an inventory of online accounts – email, social media, online stores, photo-sharing accounts, subscriptions, rewards programs, as well as any websites or blogs you may own. In the past, this was often a master password list in a spreadsheet or notebook. However, in our experience, these lists are often updated inconsistently and are rarely securely stored. In addition, they can be hard to locate when you pass away.
Using an online password manager (such as 1Password, Bitwarden, Proton Pass, NordPass, or Dashlane) is easier to keep current, because they prompt you to update the list each time a password is changed. Each typically offers a free tier and a paid tier, with the paid tiers falling within a modest range of $20-$50 per year.
For those using an iPhone, Apple’s Passwords feature has gotten several upgrades recently. While the features are generally well reviewed, they are a bit limited relative to the password managers noted above.
Most password managers offer a “notes” section for each account, where you can leave details for the person handling your estate. In addition, they can be used to generate unique, complex passwords to help reduce your risk of hacking. These passwords are stored so that you don’t have to memorize them.
At your death, this will give your executor one portal through which to manage and access all of your accounts.
Of course, the password sites themselves could be hacked. But the most reputable password managers use military grade encryption that is a deterrent to typical brute force hacking methods. While all systems have weaknesses, it is likely that the password manager, with its encryption, multi-factor authentication, and advanced security measures are more secure than alternative methods like spreadsheets or lists. In addition, many of us overestimate how “tricky” or complex our password formulas are.
One further note of caution: don’t include your passwords or other digital asset access information in your will as it becomes a public document at death.
Lastly, one area where a password manager may not help – your cellphone. The PIN number to your phone (or tablet), or the password to access your PC, are typically set outside the realm of the password manager. Consider creating a note within the password manager listing out these access codes.
Consider What Happens to Accounts When You’re Gone
Creating a digital inventory is a start. But what do you want to happen to your various assets and accounts at your incapacity or death? You may want some assets to be archived and saved, others to be deleted or erased, and still others to be transferred to family, friends, or colleagues.
For each account or asset, you need to specify how you’d like your executor to handle that asset. Family photo albums are often passed down from one generation to the next. What should happen to the years of photos and documents stored on your hard drive or in the cloud? Should social media profiles be shut down, or left up as virtual memorials?
Think thoroughly about any accounts that may hold cash balances or financial value – gambling sites, PayPal or Venmo, gaming platforms, or travel loyalty programs. Should credits, points, or cash values be redeemed?
Do you have any revenue-generating assets, like a YouTube channel, or Etsy or eBay storefront? Should these be transferred to people who will continue to manage the accounts or shut down? It’s worth thinking about where that money is going, and who’ll be able to access it after you’re gone.
Appoint an Executor and Use the Legacy Contact Feature
Once you have clearly laid out your intentions for your digital life, you should appoint a digital executor. While this can be the executor of your financial estate, it can be anyone you trust to fulfill the wishes laid out above.
While appointing a digital executor gives them wide latitude to act upon your wishes, it is still important to pay attention to the terms of service for your various accounts.
Some of the largest online platforms offer the ability to designate a legacy contact. Google (Inactive Account Manager), Apple (Legacy Contact), and Facebook (Legacy Contact) have offered this feature for several years now.
Most password managers also let you designate an emergency contact and set a waiting period. For example, if you choose a 20-day window and your emergency contact requests access, they’ll be granted entry to your account unless you decline the request within those 20 days. You can also limit their access to specific accounts or categories, giving you control over what information they can see. Even if you have appointed a digital executor and use a password manager, we recommend you use these legacy contact features as well. They can help your executor avoid hiccups and provide quicker access to your most active accounts.
Completing the Picture: Your Digital Legacy
With the spread of RUFADAA, we now have a legal framework that allows us to decide what happens to our digital lives at death. Ten years ago, this would have seemed of minor importance. But with the rise of virtual work, online commerce, and digital financial assets, digital estate planning in the event of incapacity or death has become a critical piece of a well-crafted estate plan.
Presented by Christopher Rivers, CFP®, CRPC®
