Thirty years ago, when my father passed away, my brother and I knew just where to look for all of his financial papers. Some were in his top desk drawer. The rest were in the family safe deposit box.
Death in the digital age is much more complicated. Many of our most important assets are stored online and locked up with a user name and password. Others are right there on our computer, but encrypted and password protected.
“I have lots of clients thinking about these issues,” says Patricia Char, an attorney with K&L Gates in Seattle.
Char tells her clients they must consider which family members or advisors they want to have access to their digital life when they die or if they become incapacitated.
“Who owns their online photos? Who do they want accessing their e-mail account? What about the content downloaded on their cell phone?”
Digital property can live on long after your death. It can also be destroyed before anyone realizes it.
“It’s a double-edged sword,” notes James Lamm, an attorney with Gray Plant Mooty in Minneapolis.
Some people want their social media pages shut down at their death. Others want them to continue as a memorial after they’re gone.
“In either case, you must do the proper advance planning or it can be extremely difficult, if not impossible, to carry out your wishes,” Lamm says.
A soldier’s story
Lance Corporal Justin Ellsworth, a combat engineer with the Marine Corps, died in Iraq in November 2004, during the invasion of Fallujah.
During his deployment, Justin and his father were in constant e-mail contact. John Ellsworth, a police officer in the Detroit area, knew his son had saved messages of encouragement and support on his Yahoo account.
Mr. Ellsworth wanted those messages, but he couldn’t access his son’s account. Justin had changed his password a few weeks before his death and had forgotten to share it with his dad.
Ellsworth was locked out and Yahoo said it was legally prohibited from giving him access.
“I was very frustrated. I wanted to read the words my son had written and received,” Ellsworth says.
Even worse, Yahoo said the inactive account would be deleted in 90 days.
Ellsworth hired Brian Dailey, an attorney in Royal Oak, Mich., sued and eventually got copies of his son’s e-mails. Ellsworth tells me it was a “very stressful five months” not knowing what would happen.
Dailey says he’s handled many similar cases. They can cost thousands of dollars to litigate.
Both the heartache and expense could be avoided, he says, with some simple estate planning that spells out what happens to the content of e-mail accounts at death.
Jeremy Toeman, a San Francisco entrepreneur, launched Legacy Locker in April. He says he got the idea on an airplane as he worried how his wife would deal with his numerous online accounts if the plane crashed.
“Everything I do online is now tracked and accounted for on the Legacy Locker site,” Toeman says. “If something happened to me, nobody would have to go scrambling on my computer trying to find out where I had saved certain documents.”
Is a digital storage service like this any different from keeping your important information in a home safe or safety deposit box at the bank? Toeman believes it’s a matter of convenience.
“With the pace that people are working today and the amount of time they spend behind the computer, when there are solutions that are fast, convenient and reasonably priced, consumers tend to opt that way.”
What about safety? I’d be worried a hacker could break into this site and get all of my most sensitive data. Toeman says he uses state-of-the art encryption that even keeps him from accessing other people’s accounts.
Rabbi Micah Hyman is one of about 10,000 people who currently use Legacy Locker. Toeman is a member of his congregation.
Rabbi Hyman, 36, says joining the service prodded him and his wife to get their affairs in order now, when they are young and healthy.
“It’s safe and secure in a virtual not physical space,” he says, “which means it can be accessed anytime and from anywhere.”
Legacy Locker charges $30 a year or $300 for a lifetime subscription. There’s also a free trial version with limited storage and only one beneficiary.
The bottom line
It is critical to consider your digital assets when you do your estate planning. Where you store this information is less important.
“The key it that you do it and you make sure someone can find it,” says attorney Patricia Char.
You need to list what you have, how to access it and who can access it. You should also give specific instructions where appropriate. For instance, “I want my Facebook account closed at death,” or “I want all the photos in my Shutterfly account sent to my daughter.”
Because passwords change constantly, using a digital vault is convenient, but it’s not necessary. You can keep a list of accounts and passwords in a tablet stored in your desk if you want.
Just be sure to update this information immediately any time you make changes.
As every financial planner likes to point out, you never know when you’ll get hit by a bus.