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.

Attorney Philip Ruce of Stone Arch Law visits WCCOCBS Minnesota to talk about digital estate planning. 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.

Key Discussion Points

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.

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 a Professional

Digital estate planning can be a confusing venture, and oftentimes, little but important details are overlooked. Working with a professional, such as an estate planning attorney, 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.

Interview Transcript

Interviewer:
So much of our lives are online these days, from photos and social media profiles to banking and email accounts. But do you have a plan to protect that information if a hacker strikes? I spoke with local attorney Phil Ruce about what to do before the unexpected happens.

Phil Ruce, thank you so much for having some time to talk with us about protecting all aspects of our life when it comes to our digital footprint. We’ll start with keeping things general. What steps can people take right now to protect their digital accounts?

Philip J. Ruce:
Thanks, Jeff. It’s great to be here tonight. There are three big steps we always talk to our clients about when it comes to their digital estate plan, and the first one is going to be collecting or inventorying their passwords. Step two is going to be appointing a digital executor or personal representative. It’s kind of a switching title, depending on the situation. And lastly, make sure you work with a professional.

When we talk about collecting or inventorying our passwords, think of all the stuff that you have out there. Think of these email accounts. Think of someone who has digital videos and digital family photos on some backup or digital backup or cloud somewhere. Someone’s going to want to be able to download those things, and we need to make sure that we’re keeping track of how to get into those accounts.

Not only that, we’ve got issues with fraud and some other things too, but we want to make sure that we actually have a cheat sheet. Some people have a notebook, some people have their spreadsheet, whatever it is. There are also a number of online password programs. A couple that I see regularly are LastPass, we see Dashlane, and a couple of others are out there.

What these are going to do is automatically for you, during life, this has nothing to do with estate planning, but they’re going to track your passwords for you, give you one master password, and then if something happens to me, I can have a point person who is going to be able to access those, and that person is typically our digital executor, step number two.

An executor is a formal term for someone who’s appointed or personal representative for somebody who’s appointed by the court to handle an estate. Oftentimes, that’s traditional estate planning, property, your house, your money, et cetera. But this can be a lot of work, this sort of digital world, so oftentimes it’s nice to be able to appoint a point person to do this.

Our team at Stone Arch Law Office does provide the proper authorizations for this person to be able to act, but even if you didn’t do that, Minnesota does have laws on the books that allow the executor of your estate, your personal representative, your court appointee, to be able to access these things.

Interviewer:
And that’s what you’ve been weaving through, all those ways of protecting our digital footprint are digital estate planning. Some people have a will, but there’s another aspect of protecting the things that we own. So, what is digital estate planning?

Philip J. Ruce:
When we talk about traditional estate planning, what we’re talking about is, again, my house, my heirlooms, money, investments, brokerage accounts, whatever it is, how do we coordinate those things? And what we like to say is, how do we get the right things to the right people, at the right time, the right way?

When it comes to your digital life, we’ve got some added complications. We not only have these passwords, this encryption, certain kinds of encryption, but we also have dual-factor authentication, where they send you that one-time passcode, and how do they send that to you?

They send it to you over your cell phone, or they send it to you over an email address. Sure would be nice if someone could access those things to make that easier. Another aspect that we have when it comes to estate planning is if we don’t do this properly, there can actually be some criminal penalties, and we’ve got to be very careful with that.

Interviewer:
And maybe this rolls into the next question here, why does digital estate planning matter?

Philip J. Ruce:
There are two big problems that we run into. The first one is fraud. This is an AARP statistic, but it’s something like 2.5 million people who had passed away had their information used last year for fraudulent purposes. So we certainly have this fraudulent aspect. We have to get someone in who can shut down email accounts. Who is it that can shut down credit cards?

Not only do we have the fraudulent problem, but we also have the issue of just this practical thing. We’ve got all these automated payments that are coming out of bank accounts. Can someone monitor my bank account so that I know, or so that I can feel secure that when I’m gone, these automatic payments are going to be stopped?

What if the wrong person got a hold of one of my credit cards and they continue to use it, and of course, I’ve got this auto debit to pay this thing off every month. The heirs to my estate would be very disappointed if they found that this money was disappearing like that.

Interviewer:
Well, Phil, I appreciate you taking some of our questions and helping the next generation learn how to prepare for the future and protect what is theirs, with so many of us living in this digital world. Thank you again for your time.

Philip J. Ruce:
My pleasure. Thank you, Jeff.