Creating a succession plan for data after death

Creating a succession plan for data after death

The one certainty in life is death.

The experience will be traumatic, scary and confusing for those left behind. For that reason, estate planning is the last conversation that any person wants to have. It’s critical, however, for consumers to ensure that their personal and professional assets remain in good hands.

For business owners and solo-entrepreneurs, succession planning can be much more complicated.

In the event of a founder’s unexpected passing, the remaining team needs to carry on without interruptions.

Mark Snow

Attorneys and financial advisors can help facilitate a smooth transition for business operations, proprietary documents and plans. But what happens to intangible assets, like a business owner’s data?

“Today, business succession planning is multifaceted, taking into account more than just who will take over a business or company,” says estate planning lawyer Gary Altman. “In response to our technologically advanced world, we now include planning for one’s digital estate.”

A digital estate, according to Altman, includes financial accounts, passwords, social media content and any other data being utilized by a business. Business owners need a clear plan for who receives access to information and how long a successor should have access.

“These details should be spelled out in advance,” says Altman.

More than spreadsheets

Altman points out that a succession plan can be as simple as a password-protected Word or Excel document on a secure computer.

“These systems could have all the business digital data and access to information that will be needed after the owner passes,” says Altman. “There are several companies offering various forms of data security and even companies that store passwords and provide access to those authorized.”

These documents should be prepared as part of a larger strategy and vision.

“The first step is to meet with an experienced estate and business planning attorney to discuss what the owner’s intentions are,” says Altman.

These professionals can provide direction toward the most effective tools and resources for accomplishing key intentions.

“The only way to ensure a smooth transition of data to successors is to have a legally documented plan, as well as to authorize someone else access to the full range of business data,” says Altman. “The plan will give clear authority to the chosen successor and explain what this person needs to do.”

Process management

Mark Snow and his team built SafelyFiled, an Internet-based company to assist individuals in the organization and storage of important documents, after dealing with the experience of settling their family members’ estates.

“My father had an insurance agency when he died, and though he was a very organized man, his method of organizing was not apparent until just about all the documents were found,” says Snow. “We realized that there had to be an easier way to deal with the masses of documents created by a business.”

With so many records in digital form, heirs may be unaware of assets and important files.

“We created SafelyFiled to help,” says Snow. “Secure cloud storage is ideal for this function. By not having the data on premises or on a desktop, it is protected from natural disasters like floods, tornadoes and fires.”

Snow says that a well-designed cloud service will provide protection from malware or cybertheft.

“It is critical that the cloud storage service also provide a way to make sure data is not changed,” says Snow. “If the data can be changed, there should be a complete audit trail.”

For instance, these records can be valuable in the event of an IRS audit or dispute with internal stakeholders. For accounting purposes, there should be strict limitations around deletion of files so that there is a traceable record of assets and liabilities.

Snow emphasizes that a succession plan should be designed with the future in mind.

“Assets like client lists or trade secrets need to be protected and secured, with reasonable assurances to the buyer that these assets have not been leaked,” says Snow.

The power tool that Snow recommends to maintain order? A checklist.

“The plan must be simple enough that it will actually be used,” he says.

Online Life After Death – Digital Asset Estate Planning

Online Life After Death – Digital Asset Estate Planning

Most of us have a significant presence in the digital world whether we realize it or not.

If you were to list all your digital accounts and assets, the number would probably surprise you. You may have online accounts with banks, merchants, a brokerage firm, social media platforms, cloud storage companies, gaming sites and email providers. Perhaps you have a blog or own a number of domain names. Some items such as your digital photo collection or your Facebook log may not have a monetary value, but they may have personal meaning for your loved ones. Other items may range in value from coupon credits accrued with your favorite online retailer to a significant balance in a PayPal or even Bitcoin account. You may have thousands of frequent flyer miles, a cash-back reward balance from your credit card company, or an online trading account balance. Your online business presence may include eBay, Etsy or your own web-based company.

Whatever monetary or personal value these types of examples may possess, digital asset estate planning is essential to ensure that your online life after death is handled in an orderly manner according to your wishes.

In addition to online accounts and assets, your personal digital devices and their content should be considered as well.

Your computer or laptop as well as your tablet, e-reader, cellphone or smartphone and all manner of offline storage form part of your digital estate. These storage formats include CDs and DVDs, peripheral storage drives, and memory cards. Tangible paper records are becoming increasingly a thing of the past; for most of us, it is the digital trail we leave that tells the story of our personal, professional and financial lives.

The conductor and composer Leonard Bernstein, an icon of 20th-century classical music, passed away in 1990 and left behind a memoir called Blue Ink in a password-protected computer file. He did not share the password, and so far, no one has been able to access this presumably significant work. Clarifying your wishes regarding your digital legacy is crucial to any well-formulated estate plan. You can start by providing your executor a complete digital inventory together with the necessary means of accessing it.

Digital Assets – A New Frontier

There’s more to consider, however. From a legal perspective, the status of digital assets within estate planning is a new frontier. They may fall within intellectual property, intangible assets or license categories.    While it may seem reasonable to assume that a next-of-kin could simply step in and manage or dispose of digital accounts, this is a risky endeavor. Federal and state laws designed to prevent hacking, identity theft and online fraud can inadvertently prevent loved ones or your executor from legally accessing your digital assets if you die. Many sites and account issuers allow only the primary account holder to enjoy access and can be inflexible on that point.

In Ellsworth vs. Yahoo, a 2005 legal case out of Michigan, the father of a Marine killed in Iraq was forced to seek access through the courts to his son’s Yahoo email account after Yahoo initially refused to provide it. Yahoo eventually complied with an order to produce the email records.

While the need for a court order is extreme, some platforms such as Gmail, Flickr and Twitter request a death certificate and related documents to gain access to accounts and records. Some states such as Oklahoma and Connecticut have introduced statutes designed to provide access to the deceased person’s email and social networking accounts, but comprehensive digital asset protection and disposition after death remains a complicated matter best discussed with your estate attorney.

As stated, the goal will be to identify a complete inventory, directions for access and any information necessary for your digital assets to be valued accurately. You may prefer that some records be destroyed and the accounts closed upon your death while others be willed to specific individuals. You may wish to bequeath your laptop to one person but prefer the contents be destroyed or given to a different heir. The importance of specifying your exact wishes is not to be underestimated. Our digital lives have grown and will continue to grow exponentially, and the peace of mind that estate planning affords will remain elusive until you include your digital assets in this important endeavor.

Clear rules needed for managing digital afterlife

eBook: table of content.


I. Introduction

II. Good practices

III. Steps to follow: an audit

  • 1. Do an online cartography
  • 2. Remove what you don’t use
  • 3. Cloud what you can
  • 4. Update a password list
  • 5. And do it regularly

IV. To be prepared if sh*t happen

  • Prepare a will executor
  • A trendy alternative
  • Prepare a digital legacy locker
  • Do you want a physical locker ?
  • Prepare your data flows today
  • Write out instructions for each package
  • The Poor Man solution
  • Get to know more

V. Bye

  • Beware !
  • Thanks!
  • Long live the King (or Queen)
  • A service checklist

List of services // digital legacy tools 

Death policies of your the different services you may use

Clear rules needed for managing digital afterlife

A topo of digital assets versus tangible assets

A regular definition of a digital asset can be “Anything that is stored digitally, in the cloud or on local media, that might have financial, personal or emotional value”.

Your digital and online assets can be classified in two categories. On the one hand, accounts, which are keys that lead to the digital vaults like iTunes, twitter, facebook, … . On the other hand, you do have digital goods like emails, photos, tweets, music, ebooks, movies, and so on. Apart from these, you can also have digital currency, in the form of money sitting on paypal, bitcoins, online games accounts.

 People start recognizing the value of their digital assets. Take Facebook. It appears that around 10% of Britons leave their facebook password in their will# — and amongst the reasons are the fact that our photo albums do not sit at home.. but in the cloud.

 Lastly, it’s not because it’s a in game that a digital asset will have no value. They are auction websites specialized in trading items or local currencies for online games. A sword in a game (was Age of Wulin) can be sold 16k$ — and World of Warcraft fans can sell their characters from 500 to 800$ for characters on which some time was spent, to 5000$ for some well equipped warriors.

 You can consider as well your eBook library, songs and electronic movie catalog (all of them being legal and paid for, I’m sure), as well as, let’s say, your apps, for which you’ll be spending around 10$ a month# in average. Whatever the support digital assets rely on, they still represent prized possessions, with a clear financial value, but also a nice sentimental and personal value.

 A washington estate attorney took the example of one client having a complete activity and business online. A photograph today can have pictures that are published or licensed, thousands of pictures stored digitally, instructional videos and tutorials, etc.

Now imagine her heirs going into her house after her departure: there may be no trace of her business, save for the camera and set-ups. But the products would not be there, maybe no negatives, or prints, even less film rolls. Contracts, licenses, all accounts could be stored as well in the cloud. Without a proper planning, her whole life work could be done: no more publishing or licensing.