When a loved one asks you to execute their will, swallow hard, breathe deep, and then commit the time to find out everything you can about their intentions—and the whereabouts of essential documents and accounts. These days, that means attending to digital accounts, assets and passwords too. As estate planning lawyers explain, password protection can make life (and death) complicated.
No More Paper Trails
Although password protection is of course necessary to protect our identities, data and assets from the rising tide of cybercrime, layers of protection and privacy laws can present extra challenges for executors. As Kansas estate planning lawyer Kyle Krull explains:“Prior to the digital age, executors would be able to simply sort through physical mail and paper files to gather information on the accounts, assets, and liabilities of the deceased individual. Now this information is challenging to gather.There is no paper trail and the digital accounts have password protection.Often recovering these passwords requires more than simply knowing the account information. Several require multifactor authentication, facial recognition, or fingerprints.They are also further complicated by federal data privacy laws.”
To avoid stressful detective work later, executors are advised to prepare ahead by creating a digital inventory with loved ones. Krull provides this list of accounts and assets to consider: social media accounts, traditional banking accounts, investment accounts, retirement accounts, money transfer accounts like PayPal or Venmo, Cryptocurrency wallets, nonfungible token assets, insurance polices and accounts, home and utility accounts, smartphone accounts, online storage accounts, video accounts, music accounts, photo accounts, subscription services, gaming accounts, and rewards or loyalty programs.
With a list of digital assets in hand, executors need to keep going: noting the specific account numbers, passwords and other information that will ultimately be needed to access them. Depending on the circumstances, executors may even want to discuss and plan for the transfer or closure of accounts, or addition of users. Of course, the resulting, completed inventory of digital assets needs to be kept secure, too! Since wills pass through the public process of probate, it is not advisable to include digital access information and codes with the will. As estate law experts suggest: “You may opt to give your digital estate plan to your attorney, use a secure digital storage service that your executor has access to, or lock it in a safe. Just make sure your digital executor knows where it is and is able to access it when needed.”
Remember, executors are fiduciaries, with the legal responsibility of protecting the interests of the estate and beneficiaries. That’s why fiduciary bonds, such as executor bonds can be helpful—and are sometimes even required. Essentially, the bond guarantees that the executor will carry out all duties in accordance with the law. Colonial Surety is here to help executors in any state quickly obtain their required bonds—and avoid probate delays. At Colonial, the steps to obtaining executor and other bonds are quick and easy: get a quote online, fill out the information, and enter the payment method. Instantly print or e-file the bond right from anywhere—even probate court. Obtain Executor Bonds Here.
Good to Know: Digital Executor?
Lawyers point out that typically, when we sign up for digital accounts, the information about what happens upon death is included in the small print we agree to as we scroll along. Companies may for example have a policy for terminating accounts or detail how and when next of kin can access them. Experts at Wilson & Wilson advise that although most states have legislation in place regarding the management of digital assets, it’s not a bad idea for families to consider appointing a digital executor: “In many states your will executor won’t automatically gain access to your online information. You’ll need to assign someone to handle your digital assets and provide them with the information and materials to do so. People often use the same executor as their will to manage their digital estate, but you can also choose a different person if you wish.”
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