Some of our most precious memories, are captured in our family photographs. Our photos used to be stored in boxes or drawers or, in the case of my family, in fairly well organized, wildly colorful 70's era photo albums. Today, we've traded those colorful albums for phones, hard drives and cloud-based storage systems. With this generational shift, we've ushered in a new era of enhanced responsibilities to ensure that all those memories are not lost with us.
Have you ever considered what would happen to your family photos if something were to happen to you? Are they stored in the cloud? Who actually owns them? Are they backed up on a physical hard drive? Who has the necessary passwords or knows where to find them?
Planning for the smooth transition of your digital assets to your heirs, like your family photos, is known as digital estate planning. This article is intended to serve as a primer on this topic but it is certainly not all-encompassing given the complexity of the subject. If you are a client of Breakwater Financial, then you should expect to hear more about this topic during our review meetings.
Photos are important but your digital assets are actually comprised of a huge range of categories including physical devices (computers, smartphones, tablets) data that is stored in your devices and/or in the cloud. User accounts to email, social media, and other web-based services. You may also own cryptocurrencies, web domains, or other digital property rights. This list may not be complete given your unique situation, but it should start to help you realize how vast your digital asset collection may actually be.
The process of estate planning for your digital assets is complicated because it is a new addition to traditional estate planning and there are many gray areas due to few legal precedents. Additionally, many of the web services that you use are governed by a user agreement between you and the service provider and by strict privacy laws. These laws may serve you well while you are alive, but they may also create significant issues for your heirs when trying to access your data.
Let's say you use Apple's iCloud service to store your photos and videos. After your passing, Apple will require a court order that names your next of kin the rightful inheritor of your personal information (i.e. your digital photos and videos). And Apple is not alone in its strict enforcement of its data privacy rules, even in death. Luckily, Apple announced just this week at its annual developers conference that they will join other technology platforms in offering a digital legacy feature within iOS 15 which is due to be released this fall. More on digital legacy services below.
With all of the complexities concerning digital estate planning, it's important to understand what you can do now to help improve your individual plan. Below are a few tips to help get you started.
Inventory Your Digital Assets
Start by building a list of every important digital asset that you own. Consider reviewing your web browser bookmarks and/or bank account charges to help get you started. Remember to include devices, data, user accounts and other items that represent property rights to digital assets.
Decide Your Wishes
Consider how you would like each digital asset handled after your death. Who becomes the new owner of the family photos? Do you want your Facebook account deleted or preserved? Who will inherit your devices and possibly the content stored on them? Which devices or data would you like destroyed?
Take Advantage of Legacy Contacts & Account Managers
A number of the most common web-based services allow you to take steps such as establishing a legacy contact or an emergency contact to act for you in the event of your death or disability. For example, Facebook allows you to establish a legacy contact on your account. Your Facebook legacy contact would be able to write a pinned post to your profile sharing a final message or information about a memorial service, for example. Your Facebook legacy contact would also be allowed to download a copy of what you've shared on Facebook, update your picture, and request the removal of your account. Similarly, Google allows you to establish an inactive account manager. After your death, Google will work with the inactive account manager to close your account and/or under certain circumstances may allow the sharing of some of your content. And as mentioned above, Apple will soon be offering a digital legacy service that will allow someone that you appoint to gain access to your iCloud data. Apple will require a copy of the death certificate provided by the named legacy contact. Once approved, they should allow for the download of data stored in iCloud including photos and videos.
It is critical to note that none of the digital legacy services mentioned above will set themselves up automatically. You must be the one to proactively establish these directives and ensure they stay up-and-running.
Organize and Secure your Passwords
As the digitization of our lives continue, our passwords will continue to grow in number, importance, and risk. It is absolutely critical to develop a system to manage your passwords. The common strategy of choosing the same password over and over and/or of using an easily guessed password is inherently flawed. Consider what would happen if you use the same password for multiple websites and one of those sites gets hacked. Now the cyber criminals have the passwords to all of the other sites you access. This certainly happens and it does so with ever increasingly frequency. And trust me, cyber criminals are smart. Their default assumption is that you are using the same password for many different websites.
A better strategy to managing your passwords is to create unique, complex passwords for each website that you access and store all of your passwords in a secure, organized way. There are many ways to accomplish this, one option is a dedicated password manager. Once you've developed an organizational system for your passwords, it will be easier to share your passwords with others while you are alive or after your passing should the need arise. Just be certain to also consider any laws and regulations that would prohibit someone other than you, from accessing your online accounts.
Consult with your Estate Planning Attorney
Work with your estate planning attorney to update your documents to include the provisions necessary for a smoother transition of your digital assets. With the help of your attorney you can formalize how you wish to have your digital assets handled and by whom. I would recommend working with an estate planner who has experience in planning for one's digital estate. In doing so, you'll be able to come up with a solid plan to help address this complicated task and to give you peace of mind.
As with so many things in the world of financial planning, it is those who are willing to put in the time and effort to be prepared who will reap the rewards. When it comes to digital estate planning, it is your heirs and loved ones who will benefit most from your efforts. Hopefully, thanks to your work, they will be able to cherish those family photos for years many to come.
Abe Ringer, CFP®
Breakwater Financial, LLC is a registered investment advisor. The content of this blog post is for informational and educational purposes only and is not to be considered investment, legal or tax advice. If you have any questions regarding this blog post, please contact us.