All of us have a digital footprint, the extent of which differs from person to person. We have our online photos, social media accounts, emails, and even important online financial wallets and bank accounts.
A lot of people forget about these when planning their estates. But with the growing importance of online platforms, it’s crucial that individuals know how to protect their digital accounts and plan for what happens to them when they pass away.
Watch the interview with Attorney Philip Ruce of Stone Arch Law about digital estate planning on WCCO/CBS Minnesota. He covers everything individuals need to be aware of, from what it is and why it’s important to specific steps on how to protect digital assets.
What is Digital Estate Planning?
Traditional estate planning typically covers assets such as a house, heirlooms, money, investments, brokerage accounts, etc., and lays down rules on how these should be managed and coordinated. It provides guidelines on how these assets should be distributed, who should receive them, and when.
Digital estate planning is similar to traditional estate planning, but with some added complications. This is mostly because online accounts are protected by passwords, encryption, and dual-factor authentication, among other things.
Planning for who is able to access these digital accounts is just as important as planning other assets and investments when the time comes to manage affairs after death. Read more in our article, Philip Ruce of Stone Arch Law Office Returns to KSTP to Speak About Digital Asset Planning
Steps to Take to Protect Digital Accounts
Attorney Philip Ruce lays down three big steps that people need to do to plan and protect their digital assets: creating an inventory of passwords, appointing a digital executor, and working with a professional.
Create an Inventory of Passwords
Most people don’t use one password for all their digital accounts. In fact, it’s not recommended to have a master password so that each account has its own layer of protection. But with multiple passwords also comes the difficulty of remembering each one of them, more so allowing family or friends to access them for estate affairs.
Attorney Philip Ruce recommends creating an inventory of passwords to keep track of all the accounts a person has and how they can be accessed. This can be kept in a notebook, spreadsheet, or password programs like LastPass and Dashlane.
Appoint a Digital Executor or Personal Representative
An inventory of passwords won’t help if no one knows about it. Ideally, individuals should make sure to have a point person who can access the password inventory and have the authority to manage the digital accounts. This point person functions as a digital executor or personal representative.
Similar to how the court appoints someone to handle an estate, there should also be a person in charge of digital assets. Individuals can choose anyone to do this, but they should make sure it’s someone they trust.
If proper authorization to manage digital accounts is not provided, Minnesota has laws that allow the estate’s executor to access them.
Work With an Estate Planning Professional in Minneapolis
Digital estate planning can be a confusing venture, and oftentimes, little but important details are overlooked. Working with a professional, such as the estate planning attorneys at Stone Arch Law Office in Minneapolis, is always ideal to ensure that everything is in order and the digital accounts are able to be accessed and managed as necessary.
Why Does Digital Estate Planning Matter?
Digital accounts may not be a priority when it comes to planning an estate. But they are actually crucial to plan for, otherwise, an individual can be exposed to risks like fraud and depletion of their estate.
Prevent Fraud
Last year, about 2.5 million people who have passed away had their information used for fraudulent purposes. Most likely, they didn’t have a digital estate plan in place, which is why their digital accounts were never shut down or protected.
Prevent Depleting the Estate
With the rise of online payment platforms, many people have enrolled their credit cards or bank accounts in auto payment schemes. During life, this is seen as an advantage because of the convenience. However, without a digital estate plan, auto payments become a problem. Somebody has to have access to these digital accounts in order to stop automatic payments and therefore avoid depleting the estate.
Book a call with the team at Stone Arch Law to create your digital estate plan.
