I’m sure you saw the headlines in February for the sudden death of QuadrigaCX’s CEO Gerald Cotten. He allegedly died with the business’s passwords, meaning that their 115,000 users couldn’t access their accounts that were valued at over $188 million.
The time has come for us all to create a digital estate plan just as we create our own financial estate plans.
We are hearing of beneficiaries, agents, executors and caregivers who have no idea how to access accounts. The reason is that the accounts were stored digitally and the user names and passwords are unknown. These “virtual estates” are stored on computers and on the Internet and can be lost without log-in information. Some digital property may exist only in cyberspace or may be stored on a computer’s hard drive, on removable media, or may be stored remotely and accessed over the Internet.
Digital property includes all of the files and information that is stored on computers, such as e-mails, word processing documents, spreadsheets, pictures, audio files and movies.
It also includes Internet accounts which are governed by contracts between an individual and a service provider, such as accounts at financial institutions, accounts on shopping websites, web page and blog hosting accounts, social networking accounts, registered domain names and online video game and virtual world accounts. Bank statements, investment accounts, credit cards and cloud-based documents, such as Dropbox and Google Docs, must also be considered.
Intellectual property rights can also exist in digital property. These include pictures, music, movies, literary works, web pages, computer code and other works.
So what happens when a person becomes incapacitated or dies, leaving a trail of information that seemingly goes on and on? Think about a Facebook account, blogs, Twitter, shopping and banking sites without the active owner. Where does the information go and how can the accounts be closed?
Some accounts can be closed with a death notice but service providers have different rules and the terms and conditions are not always clearly stated.
Facebook, Gmail, and iTunes are a few providers that try to cooperate after the death of a user, but currently only a few states have laws giving executors control over the social-networking profiles of deceased users. As Internet users get older we have to think about disposing of digital property just as we write a will to dispose of our tangible goods.
Some problems exist because of the diversity of technology use among the elderly. A fairly typical couple could have one spouse very computer-literate while the other remains a luddite, having no clue or ability to access bank files or even perhaps e-mail.
The loss of money is entirely possible with an account being lost through default.
With the complexity of digital accounts, services are entering the picture, each with a different perspective on notifying designated beneficiaries upon death, illness or injury. The cost of the services varies. Service providers do not always state their rules, terms and conditions clearly. Some give users a personal right to use an account but after death, nobody else can use it. Some delete data upon the death of the owner. Access is also a matter of privacy and may need an explicit provision in a will.
In the future, digital assets will constitute an even greater part of the estate planning process as new laws are put into place.
Contacting an e-mail provider by sending a death certificate will sometimes grant access to an account. Naming an executor of your digital accounts is becoming as important as having an executor of your will and trust. Of course, having a technically skilled person as executor is the sensible way to insure coverage of a digital death.
To imagine the complexity of this problem, think about a time when you hadn’t kept track of your own password or user name on an account. Even for yourself, it most likely was a nightmare to get access to your own account. That would be just the beginning for someone involved with the passing of a person who had not kept track of all account names, numbers and passwords.
Although a survey indicates that people 45 and older with digital property think it is very important to put plans in place for their personal and financial online assets, supposedly more than half have not yet made those provisions. Is it because people do not think of digital assets in the same way as tangible assets?
We live in a world that is becoming paperless at a fast pace.
Think of how a grieving loved one would fare without passwords and proper identification. You might find “no right of survivorship and non-transferability” as part of a term of service.
To ensure that your heirs can access your digital accounts, either to close them out or to manage the dispersal of funds, start immediately to organize yourself and create a list of account names, numbers, and passwords. Be sure to keep them in a safe place and tell loved ones where all your important documents are stored.
We all need a complete estate plan, and you can start your plan today by calling Hurley Elder Care Law at (404) 843-0121 or contacting us through our website.