Click here when I die: Sites lay out plans for loved ones

Click here when I die: Sites lay out plans for loved ones

Several websites are trying to make death easier—for the people left behind.

Everplans, Everest Funeral, My Life & Wishes and other companies are helping with end-of-life planning. Users can upload digital copies of their wills, plan their funeral or name the person who will take care of the dog when they die. Access to the information can be given to a spouse, child or anyone else you’d like. The idea is to reduce the arguments over funeral plans or the frantic search for documents that can happen after a death. Some of the sites charge fees, but others are free or offer a free service through financial planners or employee benefits.

Financial advisers say everyone should write down important financial information and funeral wishes in a safe place, whether it’s on a website or in a notebook. Heirs risk losing out on money if they’re in the dark about accounts or insurance policies, says Len Hayduchok, president of Dedicated Senior Advisors in Hamilton, New Jersey.

But getting people to think about their demise is a challenge.

“People just don’t want to do it,” says Hayduchok. “It’s something that is easy to put off.”

The sites are trying to make the process more inviting.

Everplans guides users through everything they need to do, such as uploading information about life insurance policies or pensions. There’s also room to leave letters to loved ones and a place to put passwords for emails and instructions on what to do with Facebook accounts and other social media sites.

The site charges $75 a year for the service. But about 150 financial firms and advisers around the country offer Everplans to their clients, sometimes for free, says co-founder and co-CEO Abby Schneiderman. Some employers are also starting to offer Everplans to workers as a benefit, she says.

Another service, called Everest , is offered as a free perk with employee benefits. On Everest’s site, users can write out their funeral wishes or upload photos, their will or other documents. The company also offers concierge service that helps those left behind to plan funeral and deals with all the details. If your employer offers group life insurance from Aetna, Hartford or Voya, ask your human resources office if it comes with Everest. It likely does; more than 25 million people have access to Everest, says CEO Mark Duffey.

My Life & Wishes , which was launched this year, helps put together end-of-life plans online for $79 a year. Michelle and Jonathan Braddock came up with the idea after Michelle’s father passed away and left the couple scrambling to piece together his financial life. My Life & Wishes was first published as a workbook that the couple handed out to clients of the insurance company they owned. But they quickly started working on a website, realizing that updated passwords and new accounts needed to be added to the book.

“Things change so frequently,” says Jonathan Braddock.

Fidelity, which manages retirement and brokerage accounts, recently launched a free service called FidSafe that lets users upload passports, wills and other documents. Users can give access to documents to next of kin, and you don’t need to be a Fidelity customer to use it.

FidSafe was launched after most Fidelity customers surveyed said that they had never talked about end-of-life planning with their families, says Daniel Brownell, CEO of Fidelity’s document storage management subsidiary Xtrac Solutions.

Not everyone will be comfortable putting all their important information online. All the companies say that security is a priority, but even the biggest financial institutions have been hacked. Also keep in mind that some of them are just starting up, and there is a chance they may fail before you’re gone. The companies say that if that happens, there are ways to download and print out all the information you’ve posted.

If putting everything online is not for you, writing it all down in a notebook is just as good, says Hayduchok. He gives out notebooks to clients and tells them to list all their accounts, keep paperwork and let a loved one know where everything is.

“You have to communicate properly,” he says.

Laws vary on accessing digital assets of deceased

In an age when social media websites record so many life experiences and so much personal information is stored online, financial advisers and estate lawyers are increasingly advising clients on handling their digital estates as well as their financial legacies.

Laws on the books address the transfer of financial assets, such as real estate, bank accounts, stocks and even physical items like furniture and silverware. But federal and state regulations are — for the most part — in catch-up mode when it comes to digital assets.

Some states have passed laws that give executors of estates the authority to handle the decedent’s digital assets — including online accounts such as Facebook, LinkedIn and email — as they would any other assets.

Pennsylvania is not one of them, said David Walters, a financial adviser at Palisades Hudson Financial Group and author of the chapter on planning a digital estate in Palisade Hudson’s new book, “Looking Ahead: Life, Family, Wealth and Business After 55.”

“Because there are not laws in many states now addressing digital assets, executors often do not have legal authority over these assets,” Mr. Walters said. “In most cases, that means the original agreement between the online vendor and the person dictates what happens when that person dies.

“Usually what the online vendor will do is shut down the account.”

For that reason, as part of estate planning documents, Mr. Walters recommends including a list of all online accounts and passwords. The individual can stipulate what should be done with email and other online accounts upon death.

“Think about what would happen if you were to die unexpectedly or become disabled,” he said. “If your spouse or other loved one doesn’t have your user names and passwords, he or she may find it awkward at best and impossible at worst to manage your affairs.”

Pittsburgh lawyer E. David Margolis said he makes a point to discuss the issue of digital assets with clients. He asks them to fill out an “important information inventory,” which is a road map into the client’s personal affairs such as a list of financial accounts with account numbers and information about all online accounts.

“This is not something we do formally in a will. It’s for their own purposes, but some clients ask me to keep a copy,” said Mr. Margolis, a trusts and estate attorney at Buchanan Ingersoll & Rooney, Downtown.

A digital asset rarely has monetary value, “but it’s a window into your life,” Mr. Margolis said. “It’s a question of preserving access to the information.”

Digital Asset Planning for Retirement -- A New Task for Financial Advisers

Digital Asset Planning for Retirement — A New Task for Financial Advisers

Ever wonder what happens to your favorite boutique’s online website when the owner retires, becomes incapacitated, or dies?  Far too often, the answer is nothing. The site ceases to operate but remains a permanent fixture on the internet, a mere reminder of what was once your favorite shopping location. The website, software, consumer contacts, and other property of the online store could have represented substantial financial value as a digital asset. Instead, failure to plan for the disposition and management of these digital assets upon the owner’s retirement, disability or death results in a serious loss of financial value. Such a scenario presents a prime opportunity for the financial advisor to add tremendous value to his or her client’s portfolio by properly identifying, valuing, and planning for the disposition of the client’s digital assets.

For a financial adviser, the digital world represents an exciting new domain, full of compliance concerns, security issues, and valuable business generation opportunities. Advisers are rapidly becoming more aware of their own digital responsibilities. Currently, regulators in both Massachusetts and Illinois are polling registered investment advisers regarding their own cyber-security policies and practices, which include questions about account authentication, encryption procedures, software, backup files, and third-party service agreements. In the same vein, financial advisers must start thinking about their clients’ digital assets. These can represent valuable financial resources, especially in the case of a cloud-based software company.

For example, Medidata, the leading global provider of cloud-based solutions for clinical research in life sciences, heavily invests in supporting, maintaining, and protecting the security of its digital assets through infrastructure improvements, continued monitoring, proactive assessment of emerging technology platforms, and extensive back-up and recovery planning. “Medidata is focused on innovation and the transformation of life sciences R&D through the maintenance and growth of all our digital assets including hardware, clinical data and analytical algorithms.  Among these the data is the most valuable since no amount of money could ever replace it,” said David Lee, SVP, Chief Data Officer of Medidata.  Since Medidata’s digital assets are a core function of its business model as a leading cloud-based clinical technology company the security, organization, ability to analyze, and on-going reliance of its scientific and operational clinical trial data is crucial to supporting its customers’ pursuit of effective, safe, and affordable therapies.

Facebook at Mozcon - Alex
Facebook at Mozcon – Alex

Large cloud-based companies like Medidata, LinkedIn, and Facebook rely heavily on digital assets in the form of cloud computing and cloud software programs to generate revenue.  However, they are not alone.  In 2013, McAfee estimated the value of digital assets per person at roughly $35,000 worldwide.  However, Florida based attorney Christopher Bijan Whelton, notes that the value of digital assets owned by small business owners is often significantly higher and in some cases reaching tens of millions of dollars. In addition, Mr. Whelton notes that “digital assets are often forgotten in the discussion of business assets as a potential source of income.” Furthermore, small business owners also rely heavily upon their digital assets to maintain a competitive edge and create value for the consumer.

While most clients do not have the vast quantity of valuable digital assets that Medidata, LinkedIn, or Facebook possess, small business owners still need to make sure that the wealth they have accumulated in their online presence, be it via their online services, products, assets, webpages, or social media, is not lost upon retirement. Financial advisers are perfectly positioned to assist their clients in protecting and maximizing the value of these assets. When a small business owner begins to plan for retirement, financial advisers need to start asking the right questions about digital assets and help their clients manage these assets to ensure that a potential source of income is not reduced or lost. Failure to properly manage digital assets could result in a financial loss to a small business owner when he or she tries to sell the company to create retirement income. Additionally, some digital assets could remain the property of the retiree and may even provide a continuing source of income throughout retirement.

In order to maximize the value of a client’s digital assets, one must first identify the assets.  This process could be expedited by utilizing a fact finding process or a checklist of questions that can help pinpoint potential sources of digital assets. Once this determination has been made, it is crucial to do a careful valuation of the assets in question. What monetary value do the assets have to the client? Do these digital assets have a marketplace or value to third parties? If so, could the assets provide an income stream today, or later in retirement? Once the client’s assets have been identified and valued, it is imperative to rank the financial and sentimental priority of these assets to the client. If the client uses his or her social media website and profile for both personal and business purposes, he or she might not be willing to sell or transfer this asset in the future. Conversely, pure business assets might have low sentimental value but rank high as financial assets.

One of the most important considerations in planning for digital assets is the legal right of the owner to transfer the property. In some cases, the digital service provider (e.g. Google & Yahoo!) will allow the individual to sell his or her digital website, domain name, etc., to another person. However, in other cases, these assets are specifically deemed non-transferable for any reason by a third-party service agreement. These legal details should be reviewed before setting up a webpage or creating any digital asset that might later be transferred. If one online service provider does not allow the transferability rights your client desires, identify a company that does.

Keeping track of the access information and the location of digital assets is also very important. Many digital assets, such as email and social media accounts, can only be accessed online with the use of a username and password. As such, the value of the assets is lost when the username and password are lost. Managing these passwords, usernames, logins, pin codes, and other identification information can be a formidable task by itself. One common solution is the placement of this private information onto an encrypted external hardware device for easy management and storage. However, safety and privacy concerns remain regarding the storage of any personal information.

As the financial planner, your next step will be to help the client think about ways to monetize the digital assets over time. In some cases, it might be as simple as making sure they can be transferred as part of the succession plan for the client’s small business. In other cases, value can be derived via leasing the assets to another company or engaging in an outright sale of the assets. When discussing the transfer or sale of digital assets as part of a small business succession plan, it is important to discuss the plan with the client’s lawyers to ensure compliance with other trust and estate planning documents. The client’s lawyer might be aware of other legal issues or planning concerns the client has not mentioned during your discussions. In many cases, the lawyer will actually be the one developing the digital estate plan and succession plan, and should be helping the client to manage his or her digital assets. Coordination between the financial advisers and the client’s other professionals is crucial to ensuring a proper retirement income plan is created that supplements and supports the client’s estate, tax, and other business plans.

As the digital world continues to evolve and the client’s goals change, the financial adviser must periodically review and maintain the plan to ensure no loss of value or opportunity for the client. While digital assets might not provide any retirement income for most clients, the opportunity should not be overlooked when available, and financial advisers need to be aware of these potential issues. Unfortunately, too many digital assets are currently mishandled, resulting in unnecessary, but serious, financial loss for the client.