Access to cyber assets crucial for effective estate planning

Gavin Came, Chairman of the Financial Planning Committee at the Financial Intermediaries Association of Southern Africa (FIA)

61% of American adult Internet users make use of online banking, according to the Pew Internet & American Life Project. As a result, it is becoming increasingly critical for people to include their online banking access details in their estate planning t

According to Gavin Came, Chairman of the Financial Planning Committee at the Financial Intermediaries Association of Southern Africa (FIA), as the world becomes increasingly digital it is becoming critical that consumers incorporate this into their estate planning measures. “This includes passwords to their digital assets such as bank accounts, investment accounts, email and websites to ensure that beneficiaries can access this critical information in the event of their death or serious medical injury.

“Basically anything that requires a user name and password must be included in the will because the service provider - whether a bank or email provider - is unable to grant the beneficiaries access to the digital estate. Even if permission is given in the will, in most cases, beneficiaries still require the access details to actually login to the accounts.”

Failing to include access details to digital assets in a will can result in real-world losses and ultimately places beneficiaries under additional financial and emotional strain, says Came.

Consider the fact that many people do their banking, pay their bills or file their tax returns online, if user details are not provided there is no way beneficiaries can cancel payment to services when they cannot access these accounts, says Came.

He says it is also important to consider the fact that by not providing passwords to email or social media accounts, these accounts will continue to exist forever, meaning messages or emails will simply go into this void with no one ever knowing that the person has passed away.

“A good way to ensure access to one’s virtual estate can be provided to beneficiaries in the event of their death or medical emergency, is to create an inventory of all the digital accounts including usernames and passwords and store this information on a flash drive which is then stored in a locked in a safe or with the will.”

There are also websites such as http://www.legacylocker.com/ and http://www.assetlock.net/ that allow users to release account information to beneficiaries once they have passed away.

According to Michael Judin, Director of Goldman, Judin Inc, it is important that consumers are also aware of the fact that large collections of digital downloads such as music or videos cannot be left to beneficiaries after death. “Unfortunately, even though physical books, CDs and DVD collections can be left to descendants, the same is not true for digitally downloaded collections of eBooks or MP3s for example. The terms of service agreed to by download stores such as Amazon or Apple iTunes grants users a “non-transferable” license to use digital content. Legally speaking, this clause prevents users from leaving these types of digital assets to heirs.”

“As people’s lives become increasingly represented online, it is vital that these digital assets are taken into consideration when it comes to estate planning to not only save heirs the financial strain of frozen assets, but to also ensure they can move on emotionally,” concludes Came.