Estate Planning in a Digital Age
Estate planning has traditionally included signing a Will, a durable financial power of attorney and a healthcare power of attorney. As technology has rapidly progressed, there are now huge quantities of information regarding assets which are digitally stored and password protected, some of which is further encrypted. Email accounts and bank statements are just some examples of digital assets.
If you are disabled, and/or at your death, it is necessary to access all asset information to begin the process of estate settlement. If your executor does not have access to passwords, decrypting information and location of storage sites, assets may be lost. Such passcodes cannot be listed in a Will or Power of Attorney, as those documents will become public record.
There are cloud storage sites and service providers who offer storage of digital asset information and passwords. However, the security of such sites is subject to question, especially in light of recent hacker attacks on sites as supposedly secure as U. S. Government employee data.
When planning for eventual disability and death, it is advisable to provide complete information on access to assets to your agent under Power of Attorney, and to your Executor under your Will. Rather than risk keeping all such private passcodes on a hackable cloud site, it is safer to store paper copies in a secure, locked location, such as a safe deposit box in a bank, or perhaps a large gun safe at home which is bolted to the floor so that it cannot be stolen. Your agent and future Executor should be given the location, and means of access such as safe combination or key, or told where you keep the safe deposit box number, location of the box and its key.
Technologically savvy clients may desire to keep such access codes stored on computer, but remember that your computer is both hackable by experts and locked to those who will need to have this information when you are ill or deceased. You should keep a list of assets by location and account number, insurance policy information, annuities, and retirement benefits on paper as well, in a similar secure physical location. This enables your agent or executor to verify and be sure all assets are accounted for. There are possible scenarios in which you and your computer are both beyond access, such as a house fire, and so physical list storage in a safe deposit box will be vital.
As technology continues to develop, keep in mind the accessibility issues, and maintain means for the wrong people to be kept out and the right people in the loop at the right time.