People are using the Internet to manage more financial transactions than ever before, from paying bills to big-money transactions like investing or real estate. Many of those who embrace the concept also enjoy the paper-free convenience of receiving their financial documents electronically—bills, account statements, annual reports, and more.
The banking industry uses password protection and data encryption to help make sure only the account owner can access his or her financial data. But what happens to those accounts when someone whose financial records exist only “in the cloud” dies unexpectedly or becomes incapacitated without disclosing or discussing their online finances with their heirs?
Before the Internet, even without a will, heirs and family members could usually uncover most of the deceased's holdings through the paper trail created by printed records and statements. Today, that's no longer the case.
Web browsers store a history—a “digital trail,” if you will—of websites the user has visited. But even if all the accounts are discovered, how do the heirs access them without the usernames and passwords that the account owner may have taken to the grave? And what if they can't even access the browser history because the computer itself is password-protected?
How to protect digital information
Does it make sense, then, to include your online passwords in your will? Probably not, say most experts, including the federal government. The Feds actually recommend naming a separate executor for “digital assets” such as social media accounts, websites, blogs and other online accounts.
That's not to say, however, that digital asset protection in the form of a “cyberwill” or digital will, for example, shouldn't be part of your overall estate plan. With that in mind, let's take a closer look at some of the options available to keep your digital assets protected, yet accessible to your heirs.
A paper list can be handy … sometimes too handy
Some people are diligent about following expert advice to use a different password for each account. They're even organized enough to keep a list of all of their online account information. In that case, the safest place to keep your “list” is probably with one of your heirs or in a safe deposit box—not in your file cabinet at home. That would keep them inaccessible to intruders, service workers, or anyone else who comes into your home. Unfortunately, it also makes them not easily accessible to you when you need to update them, which many institutions require on a regular basis.
Fortunately, there's an alternative.
Enter the 'cyberwill'
A cyberwill, also known as a digital will, is a separate document created just to provide access to your digital assets such as online accounts, social media accounts, and other Web content. Unlike paper wills, cyberwills are not kept in filing cabinets. They're stored and managed on secure servers on the Internet (“in the cloud”) by companies such as AssetLock, LegacyLocker, or SecureSafe.
Digital 'estate planning' services
Another option is a digital filing cabinet such as Javont Vault, NeatCloud, or Doxo that are installed on your desktop computer and not connected to the Internet at all. Like cyberwill storage services, they are set up to keep all of your online account information in one location. In order to access the information, you need to know the social security number of the deceased or disabled person, which makes them fairly secure.
So now that you've figured out how to protect your digital assets, you're probably wondering if it's time to appoint a digital executor as well. The answer to that, of course, is yes.
