Estate Planning in the Digital Age

Vol. 23 No. 3

By

Jay A. Soled is a professor at Rutgers University in Newark and the editor of the SLD book, Estate Planning Strategies: A Lawyer’s Guide to Retirement and Lifetime Planning. The information in this article is intended as general information only and should not be acted upon without professional advice.

Over the past two decades, the Internet has single-handedly transformed the way we conduct business and our social affairs. As we have become more deeply enmeshed in the digital age, it has become increasingly important for us to address this dimension of our lives from an estate planning perspective. This column presents a strategy for doing so.

When it comes to digital planning, estate planners generally recommend that their clients “bifurcate” their lives into two spheres: business and personal. First, consider the business sphere. Usually people at work have important passwords for their e-mail accounts, as well as for general access to the business’s server and/or “the cloud,” a term that is often used to refer to the Internet or the virtual space on the Internet where you can save documents, photos, or any other digital matter. When you die, if no one knows your passwords, it can be expensive and problematic to gain access to these accounts. In particular, if important documents are maintained on these accounts, the lack of immediate access may come at a significant economic price to the business enterprise.

Next, regarding your personal accounts, absent immediate electronic access, problems of a different nature can ensue. For example, many people have Facebook, Twitter, and personal e-mail accounts. On these accounts, they post family picture albums and maintain friendships. When you die, however, these cherished photographs could be potentially “lost,” and your friends may never know why you simply “disappeared” from the radar screen.

In light of these potential business and personal problems, estate planners and their clients should develop a coherent strategy to address these issues. Insofar as business planning is concerned, every economic enterprise should develop a strategy that would enable its business partners, in your absence, to gain access to your accounts. In some cases, what this would entail is charging a trusted employee with maintaining a handwritten list of each associate’s passwords. In other cases, rather than vesting such responsibilities with a trusted employee, this information could be maintained electronically in an encrypted fashion with a third party charged with releasing this information only upon the occurrence of one or more designated events.

Insofar as personal planning is concerned, access to your accounts can be handled informally or formally. The informal fashion is simple in nature: clients write down important account information that they periodically update and keep this written list with their other estate planning documents. The more formal method is to utilize the services of a company such as AfterSteps or Deathswitch that routinely monitors when you are responding to its electronic prompts. If you fail to respond after a designated period of time, the company presumes that you have perished and sends out messages to whomever you wish, informing them of your death; if so warranted, such messages will include important password information.

Estate planning has always been an all-inclusive endeavor. In our digital age, estate planning must go beyond what is strictly tangible and address clients’ digital concerns as well.

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