Key Factors of a Computer Digital Account (CDA) Plan to Protect Your Legacy

by Holland & Knight LLP
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Increasingly, we interact with the world around us through digital devices and social media. Compared to decades past, our most essential information is now stored on a computer or hand-held device. Everything can now be done online from managing finances to communicating with family, friends and colleagues to maintaining calendars and contacts, storing family photos, accessing books, music and periodicals to accomplishing the most routine daily tasks online. Many of us have social media accounts and some even have a personal website. Each application requires a username and password. Who will keep track of all of your accounts in the event that something happens to you? It's advised keep a list, but given the sensitive nature of the information, this list must be safe, secure and also accessible.

Hopefully, you have established an estate plan including at least a will, a durable power of attorney and healthcare directives. Those documents all require the selection of a trusted person(s), an executor and a trustee or agent (your "fiduciary"). In the event of your absence, disability or death, will your fiduciary be fully prepared to help you or your family without access to your digital assets?

There are four key components of a good computer digital account (CDA) plan:

  1. Prepare a digital asset inventory — create and remember to frequently update the list of your online accounts and digital assets.
  2. Secure the inventory — keep the list in a safe place to prevent misuse, but arrange for your fiduciary to have access to it when the need arises.
  3. Select a digital fiduciary — choose an appropriate fiduciary to access and manage your digital assets in your absence and upon your death or incapacity.
  4. Arrange for access — inform your fiduciary how to find your inventory when you cannot access it and authorize him or her in writing to access your computer and electronic accounts with your passwords.

How to Create a Digital Asset Inventory

The first step to managing your digital assets is to prepare an inventory of all of your online accounts and passwords. The most likely place to save that inventory is encrypted on your personal computer so that you can update it regularly as user names and passwords are added and changed. Strong passwords for your financial accounts — such as long passwords with a combination of letters, numbers and symbols that are different for each account and changed occasionally — are prudent. For example, the password "Fir7tn2meL2stn2me!" is very strong. Be sure to update your inventory regularly.

Steps to Secure Your CDA Plan

The next step to creating a good CDA plan is safeguarding the inventory. But what is the best way to do this? Stashing the list in a desk drawer is probably inviting trouble because it is not secure enough. A safe deposit box is impractical because you will have difficulty accessing it to update the list and to ensure your fiduciary has access to it when necessary. A home safe or lockbox is a possibility, provided your fiduciary knows how to access it when necessary.

If you prepare your inventory on a computer, you will want to save it there in order to make updating it convenient. The obvious answer is to encrypt the document on your computer. In Microsoft Word, for instance, this can be done by clicking the Office Button and selecting "Prepare," and then choosing to "Encrypt Document." You must then assign a master password to the document, which will be the key to its recovery.

You can also keep your list in an online storage account such as Dropbox or iCloud. In addition, an online password manager such as LastPass or Dashlane not only stores your usernames and passwords but inserts them on demand to open your accounts. There are also online storage accounts such as PasswordBox and My Personal DataSafe that will disclose your records to a verified individual during your life, if you choose for them to access it, and upon proof of your death.

Selecting a Digital Accounts Fiduciary

The most important key to your online asset protection is entrusting someone with access to your CDA. Some trustworthy person needs to be able to obtain the list when the need arises. Just as powers of attorney and revocable trusts are for your protection and wills and trusts benefit your loved ones, giving the right person access to your computer codes can ensure that your legacy will be managed appropriately.

There are unique considerations in selecting a fiduciary to access your digital assets as opposed to your other assets. For example, the terms of use for many social media accounts, such as Hotmail and Facebook, contain restrictions on who can access your account at your death. Those terms of use may override your ability to name the fiduciary of your choice. You should review the terms of use for each of your accounts to ensure compliance with those provisions.

When you can select a fiduciary of your choice for a digital account, be sure that the person selected is computer savvy. For example, does your mother even know how to turn on a computer, much less access online accounts? Is the corporate trustee you selected the right one to also manage your digital assets? Will a corporate trustee even agree to take on that responsibility?

Preserve Your Digital Legacy with These Simple Reminders

Remember to confide in your digital fiduciary about how to find your inventory and the circumstances under which you want him or her to take control of it. As your digital footprint continues to increase, it is imperative that you document your usernames and passwords as well as keep your inventory list current and secure. It is equally as important to ensure that the master list is accessible to a trustworthy person when the need arises to preserve your legacy. An experienced trusts and estates attorney can help you review a CDA plan as part of a comprehensive strategy to protect yourself and your heirs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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