At first, the digital age crept upon us slowly. Businesses looked at the internet skeptically, not sure how to use it. Consumers waded in bit by bit, at first dipping the proverbial toe in the water and then taking it step by step. Most of us were initially hesitant to do our banking online or keep our financial records in purely digital format or otherwise rely on the internet for managing our lives. As a result, clients rarely had need to make sure their passwords and online account information were accessible in the event of death or disability. The process to collect financial and related information when someone died or became disabled was relatively straight-forward, and paper records were (usually) easily found.
Today, however, our society has accepted life online. We are no longer testing the waters, but rather we are swimming in the deep end. Businesses transmit financial information such as bills and account information electronically. Consumers do not keep paper records of their assets. Communication is largely through e-mail and now social media. Many (if not most) people have some form of a digital or virtual life on social media websites. We maintain our family pictures, personal information, contacts, and lots of other information in digital form.
All this works fine until a death or disability. If someone such as an agent under power of attorney or a court-appointed executor is not privy to a person’s passwords, log-ins, user names, PINs, and other forms of gaining access to an account or other information, transitioning after a death or disability becomes much more difficult.
Most people think that having a Will and Power of Attorney is all they need. Perhaps. But law is slow to catch up to reality, and state probate laws (dealing with death) and principal-agent laws (dealing with the use of a power of attorney) were not designed in anticipation of the digital age. In addition, privacy laws and privacy policies, intended to limit a third party from having access to digital information, have become pervasive. With increasing frequency, when there is a death or disability we hear about difficulties and even disasters dealing with online content providers, inability to access online accounts, and financial information that is not known about because it exists only in the virtual world.
What to do to address planning in the the digital age? Does digital information have value? Should a digital existence terminate or continue, and under whose supervision? Some planners are suggesting that each client maintain a list of all passwords, log ins, user names, PINs and other access codes, so that in the event of death or disability, digital information can be easily found. One attorney who recently spoke at an event I attended asks her clients to give her this list.
This is a developing area of the law. Expect many horror stories of planning gone bad, unintended consequences, and general difficulties before the issues with digital assets and digital life are straightened out. In the meantime, clients should consider matters such as where their records are kept, what their digital assets are, and who and how someone else will gain access to them in the event of death or disability.