Making Life Easier For Your Loved Ones
A quarter of a century ago, the family would obtain a stack of death certificates and get in touch with their stockbrokers, banks, insurance agents, and the Social Security administration after the death of a loved one. Once completed, survivors would begin to put together the financial pieces of the past and move on with their own lives.
In today's digital world, we live our lives through usernames, passwords, and several security question answers. Because of this, we could potentially leave our heirs in an awful position upon our death. It would be hard to grieve when you're trying to remember your father's first grade teacher's name. To make things even more complicated, for our own security, our passwords should not only be randomly generated with many meaningless groups of characters letters and numbers, but experts recommend they be changed often. If you follow those digital rules, how would you keep your family abreast of your ongoing security protocol?
There are digital solutions which attempt to solve these digital problems, but they frankly aren't always practical.
One option, albeit old-fashioned, may be a solution: the three-ring binder. This old technology or any other large folder / container would allow you to keep an inventory of all your digital accounts, logins and passwords. Basically, in the midst of the emotional pain experienced due to a death of a loved one, would you rather look for a three-ring binder or hire someone to assist you with computer forensics?
To build your inventory, you'll need four sections: A financial section filled with annual account statements from your brokerage firm, bank, retirement plans, or any other investment or annuity account. A debt section filled with account numbers for mortgages, credit cards, auto loans, or any other type of debt. An insurance section filled with life, health, disability, long term care, and property and casualty insurance information. And finally, a cyber section dedicated to your digital life assuming it exists. Understandably the cyber section is the trickiest part. It should include major digital accounts from social media to online payment services like Venmo to a variety of financial institution’s login information. (Most of these services don't have paper account statements.) Admittedly, while passwords and usernames would be great, the biggest factor is just letting you survivors know what accounts exist and where.
After building your digital inventory, we recommend consulting with your attorney about the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). The RUFADAA was developed in 2015 to provide fiduciaries (like executors and attorneys-in-fact) with a legal path to managing the digital assets of deceased or incapacitated people. The Act applies to:
(1) an agent or attorney-in-fact acting under a durable power of attorney executed before, on, or after the effective date of the Act;
(2) a personal representative (whether under a will or intestacy) acting for a decedent who died before, on, or after the effective date of the Act;
(3) a court-appointed conservator (or guardian) appointed before, on, or after the effective date of the Act; and
(4) a trustee acting under a trust created before, on, or after the effective date of the Act.
Consulting with your attorney to draft a simple Power of Attorney or amendment to your current will and trust could save your loved ones a lot of time and effort.