Protecting your assets
Organizing digital assets—a life and death matter
Managing digital assets in life—and protecting them after you’re gone—is increasingly complex, and a growing number of providers offer a solution.
Generally speaking, these companies—for a fee—help people collect their digital assets in what’s known as a digital vault, and they help them manage the post-death transition of the assets as well. The goal is to organize a person’s digital footprint for when they are no longer around and prevent potential issues such as theft that can crop up after death.
Certainly, people can manage their digital assets without paying for professional help, but it’s not necessarily an easy task. There are many categories of digital assets, making it easy for some to get lost in the shuffle, especially for people who don’t keep close tabs.
Digital assets can include online banking, brokerage and cryptocurrency accounts. Also included are online photos, videos, blog posts, online family trees, email, social-media accounts, frequent flier miles, credit card points and more.
If your head’s already spinning, here’s something else to consider: The average person under 70 years old has more than 160 digital accounts, according to Legacy Concierge, a provider that helps people identify, protect and store their digital assets.
The good news is that many estate planning documents today contain provisions for digital assets, which wasn’t necessarily the case if the estate plan was crafted more than a few years ago. The trouble is, even when estate planning documents contain provisions for digital assets, locating the various assets can be a time-consuming and arduous task for executors if the decedent hasn’t properly prepared.
Most people, even if they keep records, don’t update their list of digital assets regularly. Even if they do, they don’t always collect all the information an executor might need, says Betsy Ehrenberg, founder and chief executive of Legacy Concierge.
These planning missteps can be costly. Forgotten assets can mean unclaimed monies for heirs, and they can also cause financial headaches, if, for instance, bills go unpaid because the executor doesn’t know certain accounts exist.
Theft is another major concern. Criminals routinely comb through death records in the hopes of making illicit gains, so time is of the essence when it comes to shutting off access to digital assets after a person has passed. That, however, requires an executor to know precisely what digital assets a person has.
That’s where digital vault providers aim to help. They do things like help people create a list of their digital assets and specify how these assets should be handled at death. For some people, using a provider to help consolidate their digital information, assist with the appointment of the digital executor and transition the accounts after death can offer piece of mind.
For people considering digital vault services, there are a number of providers to choose from, so it’s advisable to fully investigate the options. Aside from Legacy Concierge, other providers of digital vault services include AfterVault, Clocr (short for “Cloud Locker”), Directive Communication Systems, and Mylennium. This list isn’t exhaustive, and each provider has slightly different offerings, so due diligence is especially important. There are also other providers that offer a digital vault, free of charge, in connection with their other offerings.
Before signing on with any provider, first consider whether this is something you are willing—and able—to do on your own. If you’re able to keep the list up-to-date so it is easily accessible and understandable to your executor, paid services may not be necessary. If you decide to go with a provider, make sure to be clear about what services you are actually getting.
You should also be comfortable with the provider’s security features and the steps the provider is taking to safeguard your sensitive information. Since, in many cases, these options require you to store significant confidential information online, security is a huge factor to be considered, says Gary R. Botwinick, a partner at Einhorn, Barbarito, Frost & Botwinick, a Denville, N.J. law firm.
Another question to ask is whether the provider offers an auto-update feature to help avoid the issue of digital assets being overlooked. Cost, if any, is also important to understand. There can be different price points for different features; some providers may even offer a vault free alongside other paid services.
Also, before engaging one of these services, people should contact their estate-planning attorney, Botwinick says. This is to “ensure that the provisions they are putting in place with the service are consistent with any provisions in the estate plan, whether it’s set forth in a will or a trust instrument,” he says.
The contents in this article are being provided for educational and informational purposes only. The information and comments are not the views or opinions of Union Bank, its subsidiaries or affiliates.
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