"We used to talk every day but she hasn’t been online for a long time. I’m worried she got Covid and died," Humberto said, aimlessly scouring for clues about a friend he had only known on the internet. This time, the subject came up after the 30-year-old from Mexico […]
It is critical to assess the value of digital records and assets, and to make sure they are integrated into succession plans.
By Sarah Z. Collins
We now live a big part of our lives online. In the digital world, people meet, shop, interact, bank and save. The cloud is also where many of us store the visual and written memories of our lives.
It is important to see all this rich digital footprint as part of our legacy and to integrate it into our succession plans. Especially now, with the perspective and time gained during the COVID-19 crisis, we have the perfect opportunity to assess the value of our digital records and assets, and the potential for financial or sentimental loss if these digital assets become inaccessible.
What is a “digital asset”?
Digital assets include any online account or service protected by log-in security, such as identification and password. This includes services and tools you might use every day, like your phone and computer, email, social media, photos and videos, music playlists and various subscriptions.
But there are also other assets you might not think about until you need them, such as medical records, files stored on “cloud accounts,” any web domains you own, and online payment systems such as PayPal, Venmo and QuickPay. Online financial accounts are, of course, digital assets.
Does this scenario sounds familiar? You saw an ad sometime ago for an online high-yield savings account that offered a sign-up bonus. Your savings account paid very little interest, so you opened the new account online and transferred the money from the old one. Account statements and transactions for the new digital account were only accessible online. Forgetting about it was easy. You might not even have mentioned it to anyone in your family.
The question is—if something happened to you, who would know about this account? How would your beneficiaries access the funds deposited there?
What should you be doing? Here, we offer four simple steps to clean up your digital closet and keep it in order:
1) Take an inventory
Make a list of all your digital assets mentioned above and any others you can think of. In one secure place, keep a record of the names of each account, digital location and the information needed to gain access to them, such as usernames and passwords.
Let at least one trusted person know how to access your inventory. It could be your accountant, lawyer, or spouse. One effective way of providing access and keeping your accounts organized is by using and sharing a reputable online password manager that uses encryption and stores all your passwords in one place.
With financial accounts, review each by its title and make sure that beneficiaries are named. Most digital accounts, just like traditional financial accounts, allow you to name one or more beneficiaries. Joint accounts typically pass automatically to the survivor under local law.
Two useful account designations to apply are “Transfer on Death” (TOD) and “Payable on Death” (POD). These terms may ease the transition of assets and save inconvenience and unnecessary cost to your beneficiaries. Instead of using an account designation, you might also discuss with your lawyer whether you would like to put the digital account in the name of your trust or personal holding company.
For any online accounts outside your home country, it is especially important to consider your country’s local laws and any potential conflict of law. Knowing how accounts should be titled and what may happen to your assets when you can no longer manage them is an important topic to discuss with your tax advisor or lawyer.
2) Name your trusted contact person
Consider naming a trusted contact person for every one of your online financial accounts. Most online financial accounts allow you to name a trusted contact person (TCP), someone you authorize your bank or brokerage firm to contact if they believe your account may be exposed to possible financial exploitation or fraud, or if they cannot get in touch with you. Naming a TCP when you set up or review your accounts can help protect your digital assets down the road.
3) Make sure your legal documents address your digital assets and give your executor proper access
If you do not account for your digital assets in your succession plan, your heirs may not be granted access or they might have to incur inconvenience and costs to gain that access.
Lack of proper legal planning for online financial assets also could create liabilities for estate or inheritance taxes. Online financial accounts may generate income or losses that need to be woven into your overall wealth plan.
Consult your lawyer about the language that should be included in your testament or trust.
4) Always be planning
In the digital age, we are constantly creating new accounts and changing the passwords on existing ones.
Be sure to keep an ongoing record of your online presence and stay in touch with your lawyer and your J.P. Morgan advisor when you open new accounts that could affect not only your current financial status, but also your family’s future.
Digital Experts: Top Ten Guidelines On Death In A Digital World
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Two digital experts, one focused on behavior and the other on technology and law, agree—it’s time for guidelines on digital death, from Directive Communication Systems.
“We are still in the Wild West of the digital age, so people don’t know that what they’re doing can be harmful. Well-meaning people don’t know they can innocently stir up emotions, cause others to lose financial and sentimental property and even encourage fraud. “
A mother is told to go to the hospital after learning that her son has been in a bad car crash. When she arrives, the waiting area is filled with somber high school students. They knew about the crash before she did.
Two digital experts, one focused on behavior and the other on technology and law, agree—it’s time for guidelines on digital death.
Lee Poskanzer, founder of Directive Communication Systems and Dr. Carla Sofka, Professor of Social Work at Siena College and co-editor of “Dying, Death and Grief in an Online Universe,” offer ten tips on grief and loss for the digital world:
1 – Think before you tweet, post or pin. If it’s not your spouse or partner, your parent or your child, a death is not your story to share. This is about privacy and personal ownership. Digital users expect to share news as it happens, but death notification is a private matter.
2 – Don’t sensationalize another person’s tragedy. Sharing grim details can be disturbing and painful. Images and recordings should not be posted without the express permission of the family.
3 – Find out what the family’s wishes are before posting anything. It’s important to know what the family wants to share and what they would prefer to keep out of the public eye.
4— Be alert for fraud and tell the family if you see something online that does not seem right. Death notices are often the starting point for identity theft. Keep an eye out for impersonation of the deceased in profile posts and report them to the authorities immediately.
5 – Don’t contact social media platforms about someone else’s death. Contacting websites’ Customer Service can create significant and irreversible problems. Data, photos, cryptocurrency and emails can be permanently locked out and/or destroyed when well-meaning individuals contact digital platforms.
6 – Don’t dismiss the positive use of social media. Digital users, particularly teens, turn to social media for immediate emotional support from their online communities. By connecting with others, they feel less isolated. Try to be understanding if someone’s style of grieving is more public than yours.
7 – Accept strangers who post respectfully—they are part of the grieving community. Dr. Sofka has coined the term “experiential empathy” to describe people who are strangers to a family or a community but connect with them online because they have a shared loss.
8– Be thoughtful when sharing your message of grief and support. Be authentic and sincere. A short message that will remind others of what the person meant to you will be appreciated.
9 – Acts of kindness are always welcome. IRL (In Real Life) or online, it’s hard to go wrong when you are showing support, sharing grief and memories.
10 – Take proactive steps to protect your own family and your own digital assets for the unexpected. Speak with family members about your own wishes, regardless of your age or health. Look into what is most effective for accomplishing your goals. Create a plan for managing your digital assets after your death, including how you want your family to share the news of your passing. Note that password sharing is a violation of the Terms of Service Agreement with website owners, and could result in the loss of digital assets, including photos, videos, emails, digital artifacts, cryptocurrency and more. Consider using 3rd party services and experts in digital asset directives management to handle these personal and private matters.
Directive Communication Systems (DCS) is the market- leading guardian of digital assets. We serve estate professionals and individuals planning their estates, loved ones left behind, fiduciaries and website owners. DCS is the only digital asset and directives service to meet requirements of federal and state laws and website Terms of Service Agreements. Visit us at http://www.directivecommunications.com, Linked In, Twitter @directivecomms.
Dr. Carla Sofka is a professor of social work at Siena College in Loudonville, NY. Prior to her academic career, Dr. Sofka was a clinical social worker who worked in geriatric, medical, psychiatric, and hospice settings. She writes and teaches about the impact of technology on how society learns about and copes with life-threatening illness, death, and grief. She is a frequent speaker at conferences and conducts workshops, webinars, and podcasts. In addition to contributions to numerous journal articles and book chapters, she is a past-president of the Association for Death Education and Counseling.
I Needed to Save My Mother’s Memories. I Hacked Her Phone.
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Several days after my mother died in a car accident, my two sisters and I sat together in her apartment, stunned and overwhelmed. High on our horrible to-do list — along with retrieving her smashed vehicle from the tow lot, making burial plans and meeting with the rabbi — was this: getting into her cellphone.
Everything we needed to get her affairs in order was on her phone. Her contacts would tell us who to reach out to about the memorial service. Her email would tell us whether she had made plans we needed to cancel. Her finance apps would tell us whether she had been paying bills electronically. And there would be personal information, too. Her texts to family and friends. Her notepad. Her photos. The e-book she had been reading on the flight home in the hours before the accident as she left the Tulsa International Airport.
Luckily, Mom had given me the passcode to her phone only a month before. When we felt ready, I turned on her iPhone in its pink plastic case and typed in the code.
I typed in the code a second time. Again, nothing. My sisters and I looked at one another. A tightness gripped my stomach as I realized that the code Mom had given me couldn’t possibly work: That code had contained four digits, and her phone was asking for six.
Six digits means one million possible combinations, and her phone would give us only 10 tries before Apple would erase all of her data. Her old passcode had been the last four digits of the phone number at our childhood home, which ended in a zero. We decided to add two zeros to the end and were so confident that we knew how Mom’s brain worked that I paused dramatically before I tapped in the final zero, certain it would work. It did not.
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After that failure, my sisters and I treated every one of the remaining tries like some sort of nuclear access code. We made a few more attempts, none successful. With each failure, the phone made us wait longer between tries. Eventually we decided it was best to stop and find a different way in — the risk of permanently erasing everything was too great.
As a historian and biographer, I’ve made a career of reconstructing lives. To do that, you need information. The people I study and write about are entrepreneurs, innovators, famous and wealthy individuals. Their lives have been well documented in countless ways, including television interviews, newspaper and magazine articles, congressional testimony, patent records and the corporate archives of companies they founded. It’s relatively easy to reconstruct those lives, particularly if there are still friends and colleagues to help fill in the blanks.
Mom left no public record aside from a letter to the editor published in The Tulsa World. Instead, she had a dusty purple plastic bin she labeled “Memorabilia” with a Magic Marker. Inside were a prom program, a love letter from a boyfriend we had never heard of and hundreds of drawings, photos and notes from her grandchildren or us sisters as children. She had the photo albums she had made when we were little. A safe deposit box held her citizenship papers and other legal documents.
Nearly anything from the past 20 years existed only online, locked away behind passwords and firewalls. Notwithstanding the cards she made by gluing New Yorker cartoons onto cardstock, her written communications essentially stopped in the early 2000s, when she got an email account. She was a great texter, pouncing to be the first to respond in any group and embracing emojis with the passion of a preteenager. Her social media posts were politically passionate and at times head-scratchingly random.
I valued these public things, of course, but I also wanted more. We document our lives in two ways, one intended and one not. There are the emails we send, the photos we post and the comments we debate and wordsmith before hitting Return. And then there is the inadvertent record: the enraged first drafts, the unflattering selfies, the record of purchases at Amazon or Netflix, the digital sticky notes we had not meant to keep.
We work hard to curate the public self and rarely think about the shadow self. I knew from my own work, however, that off-the-cuff notes, old receipts, call logs and calendar entries can serve as proxies for feelings. A run of doctor’s appointments, a glut of calls to the same phone number that never picks up, the purchase of five types of acne cream or a self-help book — these are clues. When we are alive and artificial intelligence assembles these clues to hazard an eerily accurate prediction about our interests and future desires, we are horrified. But for a historian looking at the life of someone who has died, the same clues can lead to understanding.
As a daughter, my heart broke at the realization that digital records, along with the stories from those of us who loved Mom, were going to be the best way to be with her again, to learn from her again or to laugh again at her stupid jokes. But as a historian, my mind raced. If the only way to preserve her memories was to put together the pieces of her digital life, then we had to hack into her online accounts.
After a frantic hunt, my middle sister found a small pocket calendar in Mom’s desk. The back pages were filled with handwritten login IDs and passwords. I patted myself on the back for having insisted Mom record her passwords, and we sisters rejoiced … for about five minutes. At site after site, login page after login page, every attempt failed.
The only login and password combination that worked was for her Apple iCloud account, but she had protected it with two-factor authentication. We could see that her phone was receiving texts — texts from Apple containing the codes needed to get into her account — but we couldn’t unlock the phone, so we couldn’t see the code. I called a few high-powered techies I know from working at Stanford and living in Silicon Valley, but none of them could help. It seemed we would be locked out of everything.
Eventually I found a savior — a young employee at an Apple Store. I explained to him that I had Mom’s login ID (an email address) and the password for her Apple account, but I couldn’t override the two-factor authentication. He asked me to enter the login and password, and he grimaced when her locked phone lit up with the authentication code we could not see. Then his expression changed. “Let’s try her SIM card,” he said.
A phone’s SIM card is no bigger than the fingernail on your pinkie finger, but it is of vital importance. It gives your phone its unique identity, making it possible to associate the physical device with a specific mobile carrier and phone number. You can pop the card out of your phone by inserting a paper clip in the tiny hole you might have noticed on the side of your phone. Moving a SIM card from one phone to another is how most people move their phone number when they upgrade their devices.
The employee ejected the SIM card from Mom’s phone and put it in his own. His phone now had her phone number. We logged into Mom’s iCloud account again. This time we clicked the link that said we had not received the original two-factor passcode sent to the phone as a trusted device. We requested another be sent to her phone number. An instant later, his phone buzzed with the code. “O.K. to input this?” he asked. My heart pounded at the thought of this young stranger being with me when I peeked into Mom’s hidden digital life for the first time, but I nodded approval. He typed the code on the site.
Boom: We could see her Apple mail, her memos, her bookmarks and her photos. We had recovered a key to unlock her digital world.
At home, I put Mom’s SIM card into my husband’s phone so that it could receive texts sent to her number. Now, with her login ID and control over her phone number, I could impersonate her. At every website, I said that I forgot her password. The website tried to confirm her identity by texting a code to Mom’s registered phone number — and the code would go straight to my husband’s phone. Once I was logged in, I could then change both the password and the trusted phone number that would thereafter be associated with the account. Every time a page opened up with her name at the top, I felt a mix of elation and nausea.
It took hours, but I gained control of her email accounts, her Amazon account, her cable provider and the sites for her credit cards. We never did figure out the passcode to her phone, which means I will most likely never see the iMessages or other encrypted information. Otherwise, I now have access to almost all of her digital history.
After all that work to crack Mom’s accounts, I haven’t looked at them. It has been six months, but it’s still too soon. Looking through her digital life will mean remembering her before she was gone, back when I was a daughter with the luxury of being annoyed by her calls or texts, back before she or I understood in the visceral, never-going-back way I do now that it was all going to end. I haven’t even listened to the voice mail messages from her that I still have on my phone. I do know they almost all begin in the same way: with a pause and then her voice saying, “It’s just me.”
Leslie Berlin, a historian at Stanford, is the author, most recently, of “Troublemakers: Silicon Valley’s Coming of Age.”
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Estate Planning in a Digital World
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More and more of our daily activities are moving online. All aspects of our lives –whether financial, social, work or leisure — increasingly have a presence on our computers or the Internet. Smart estate planning, therefore, includes addressing how to handle digital assets.
Historically, estate planning consisted primarily of physical and financial assets, including items like real estate, jewelry, cars, furniture, coin collections, cash and marketable securities. Today, you also need to consider your digital assets.
- As more of our personal and financial data move online, it’s critical to ensure your estate plan addresses how to handle your digital assets.
- Since online policies around digital assets continue to evolve, planning for the administration of digital assets poses some unique challenges.
- Incorporating digital assets into your estate plan and setting up a regular process for updating this information are smart ways to ensure your survivors can easily manage these assets and your wishes in this area are fulfilled.
A few examples of digital assets to include in your estate plan:
- E-Mail accounts;
- iTunes libraries;
- Kindle book collections;
- Blogs or Web sites;
- Facebook and Twitter accounts;
- Digital photographs and videos;
- Online shopping accounts;
- Memberships or subscriptions with credit-card information, as well as online bank and investment accounts and medical information;
Determining how to access and manage all of these different types of assets can quickly become overwhelming for your survivors if there isn’t a clear plan in place.
Estate Planning Basics
Estate planning is a process designed to help you:
- Manage and preserve your assets while alive;
- Conserve and control their distribution after your death according to your goals and objectives.
What estate planning means to you specifically depends on your unique circumstances. Your age, health, wealth, lifestyle, financial goals and many other factors determine your particular estate-planning needs.
Once an initial estate plan is in place, you should review it periodically to ensure that any changes in your wishes or situation are reflected.
Estate Planning Considerations for Digital Assets
While estate planning for digital assets follows the same basic process as planning for physical assets, it comes with some unique challenges:
- The media in which a digital asset resides may be owned by the deceased or by another entity;
- Digital assets are transitory in nature and subject to constant change;
- Legal considerations such as intellectual property and privacy laws further complicate the area of digital inheritance.
A digital estate consists of the digital-media rights that can be inherited. Along with your online presence, your digital estate includes data stored on personal devices like tablets, computers and smartphones. Two principal issues can arise over a person’s digital estate. First, the data or copyrights that belong to the deceased and can be inherited; and second, access to the deceased person’s digital estate by an executor charged with dealing with it.
Planning Tips for Digital Assets
The good news is that individual states have introduced standard governance guidelines for estate planning and digital assets. Adopted in many states and being considered in several others, the revised Uniform Fiduciary Access to Digital Assets Act provides clear rules pertaining to how an executor can manage digital assets following the death of the owner.
As you look to add digital assets to your estate, the following are some tips to get you started. You may also want to consult with your financial advisor and attorney to ensure your plan is incorporated into your regular estate plan and updated on a regular basis.
- Take an Inventory of Your Digital Assets. Start by making a list of all of your digital assets. Make sure you include any hardware — such as computers, tablets or smartphones, important computer files or documents and all online accounts.
- Identify Someone Who Will Handle Your Digital Assets. The person you have identified to handle financial matters when you are gone may not be the appropriate person to handle your digital assets. You also want to make sure you have the right team of advisors in place to help your survivors deal with these issues.
- Document Passwords to Allow Access to Your Accounts. While you are often cautioned to not write down this information, it can be helpful to your heirs and advisors to have easy access to this information in the event of your death. Given that this information will also change over time, you should plan to regularly update this document. You can keep this list in a safe deposit box or somewhere secure at home, letting your attorney or other trusted person know the location of the list.
- Provide Detailed Instructions. Make sure that your wishes are known for your digital assets after your death. Do you want your family to post funeral information on your Facebook or Twitter feed? Are there sites that you want closed down or left open? Are you earning income from a personal blog or YouTube video channel where your beneficiaries might benefit from an ongoing revenue stream? The more detailed the instructions you leave, the easier it will be for your survivors to know what to do and to ensure your final wishes are fulfilled.
- Give Appropriate Authority. Along with assigning management of your digital assets to one of your heirs and the appropriate advisors, you may also want to see if you can assign someone to act on your behalf for your online accounts to make it easier for them to be managed when you are gone.
Start Planning Today
Our digital presence continues to grow as new technologies are introduced and as we adapt to these solutions more and more. Including information on how to access and manage your digital assets in your estate-planning documents is a critical step to ensuring that your heirs can more easily manage your affairs when you are gone.
To learn more, please contact a Key Private Bank Relationship Manager.
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This piece is not intended to provide specific tax or legal advice. You should consult with your own advisors about your particular situation.
Any opinions, projections or recommendations contained herein are subject to change without notice and are not intended as individual investment advice.
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