One aspect in estate planning which is often overlooked is creating (and updating) a digital inventory. Every person should develop a digital inventory – a list of digital assets and how to access them.
Generally, you could say that digital assets have no physical location and only exist inside a person’s computer. Strictly speaking, digital assets are crypto currencies and non-fungible tokens (NFTs), but we’re using the term more broadly – to encompass any non-paper asset (even if, like a checking account, it also exists in the real world) and access to information and assets.
Why it is Important for You and Someone Else to Have this Information
There are several reasons why you need to prepare, save, and then update this information:
We all create usernames, passwords, and answers to security question. Remember that each one should be unique and somewhat difficult. Most people juggle between 10 and 100 unique assets and/or points of access. It is easy to forget them or forget which are the current ones. Jotting down notes in a code that only you understand isn’t particularly useful. Letting your phone remember your passwords isn’t particularly secure.
You may need someone to help you access an account. You may be traveling or need assistance for some other reason. If you simply forgot your access information and if you are alive and competent, and if you remember your security code answers, then you can change the passwords yourself. If. If. If. If you are incompetent or impaired for some reason, or if you don’t remember, then no one can pay your bills or access your information, or re-register your car, or order food or other necessities on Fresh Direct or Amazon or whatever, unless you’ve made a plan. Here the plan is to create an Inventory.
The function of the Inventory is to have information ready for you and for a person you trust, so your Trusted Person can assist you.
After you die, someone (presumably the Executor of your estate) is going to need to access your accounts to collect your assets, stop unnecessary charges, maybe update your Facebook page, figure out your debts and taxes, and then make a distribution according to the terms of your Will.
Types of Digital Assets and How to Complete Your Inventory
Remember, we are using the term “digital assets” includes any non-paper assets and access to assets. At Rosenthal & Markowitz, LLP, we have developed a three-page Digital Inventory worksheet to assist you in making your own inventory. We include any asset and information, whether physical or non-physical, that you access electronically. When you have prepared your digital inventory, you have a written record of all the places and information which is relevant to you – all the information someone might need, or you might need, to access. The inventory is only as good as the information, so the inventory must be updated. We urge you to date the inventory and then re-date it every time to make a change. Your inventory should include username, password, and answers to your security questions.
Then, you need to give the inventory to someone you trust who you know will keep it safe and confidential. If something happens to you, or you are locked out of your email, your checking account, digital shopping network, or other important sites, you can contact the person who has your information so you can regain access to it.
For more information about developing a digital inventory as part of your estate planning, contact us at Rosenthal & Markowitz, LLP. You may also call 914.347.1292.