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What is a Digital Estate Plan? And why do I need one?

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My client Maxine died suddenly. She and I were in the midst of an organizing project. We were sorting through hundreds of documents in a filing cabinet. “So many of them are obsolete and many are in digital form now,” Maxine observed. “It’s time for purge.” Too big a project to finish in just one organizing session, we set up a second session for the next week. “She had a massive coronary,” Maxine’s sister Elena told me when I called to confirm our session. I was stunned. “Let me know if there is anything I can do,” I told Elena.

Access KeyTwo months later the family was still settling Maxine’s estate and I got a call from Elena who Maxine appointed as her Executor. “I thought I sent a death certificate to all her banks but I just found out there’s this web account at Voya. For the past two months, money has been transferring out of that account to pay Maxine’s cell phone bill and her cable bill. It’s like a ghost account. No statements, no emails…it’s not a lot of money, but I’m having a heck of a time turning off the payments!” Elena exclaimed.

Maxine’s death got me thinking about what I could do to help my clients better prepare for ‘information afterlife’. Information afterlife is the phrase I use to describe information and transactions that seem to live on after we die. And then there is all that login information to access accounts and assets that we have to leave behind for our family to settle our estates.

Let me give you an example.

Professor Elizabeth Mathews was my college professor back in the 1970s in the newly emerging field of environmental science. I always admired Professor Mathew’s organization skills as well as her enthusiasm for saving the planet. Assignments were made well in advance. Our papers were graded quickly. We always knew when the exams were. When I visited Professor Mathew at the hospital after she had a stroke, I was not surprised to learn she had a power-of-attorney in place, her brother Joe. “I’m happy to take care of things while Elizabeth is incapacitated,” Joe told me over a hospital cafeteria cup of coffee. “Thing is, I can’t find her paperwork. There are no bills in the mailbox and no statements in the house.” Elizabeth had gone green. As a devout environmentalist, that was no surprise to me. “Well that’s fine for the trees,” Joe said, “but she’s getting emails reminding her to make her car payment. I click on the link to their website but I don’t know her password so I can’t get in. I spent half a day just trying to find their phone number.” Poor Joe. Not only is he worried about Elizabeth’s health, but now he’s concerned about her finances.

The terms of service agreements regarding who can access bank accounts, cell phone companies, and all other businesses are very well-intentioned. They are designed to protect their customers against fraud and identity theft and to protect their privacy rights. But the digital age cries out for reform so that the family of a deceased, executors, attorneys, powers of attorney, and others involved in the disposition of estates can do their job. Reform is slow is coming but it is coming via the courts and state legislatures. Meanwhile, you can take action on your own behalf with a Digital Estate Plan (DEP). A Digital Estate Plan identifies ‘invisible’, digital assets that may be part of your estate such as web-only accounts. It also provides login information to appropriate authorized individuals to access your digital assets and accounts.

To get you started, click here for a free checklist for developing a Digital Estate Plan. Stay tuned for the Create Your Digital Estate Plan ebook! Please be advised that I am not an accountant, attorney, estate planner, or a financial professional of any kind. I am a professional organizer and legally unqualified to advise you about the particulars of your estate. Please consult with your accountant, lawyer, estate planner, or other professionals involved in the disposition of your estate about developing your Digital Estate Plan.

Copyright 2015 Judith Kolberg

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