Times have changed a lot when it comes to managing our life and finances. There was a time when we used to go to the bank and line up to see the teller to pay bills, get account balances, and even to withdraw and deposit money.
For many, we had a drawer or folder with all of our most recent bills. Today, how much of our personal finances is done in the electronic world. With the rapid development of smart phones, how much of our day-to-day lives sits in the palm of our hands. Not only has this shaped and changed our day-to-day lives, but it’s something we need to think about when planning our estates.
If you think about the safety deposit box in estate planning, executors and beneficiaries use to have to figure where to find the key to the safety deposit box. Nowadays, the keys are the many passwords we have for our banking, phones, computers and other key sites. Part of estate planning in the new world is finding a method to communicate these passwords to people we trust and who will need them to settle the estate and manage our financial affairs.
Related article: Communication is essential in estate planning
I had a great chat with Martin Rochwerg, Estate Planning Lawyer at Miller Thompson in Toronto who deals with issues around digital assets in estate planning on a regular basis. Rochwerg says “The biggest problem he sees in Estate Planning is that executors and trustees have trouble finding information. Sometimes the bottleneck is the passwords to files, websites and even just to get on the computer.”
Rochwerg says he has some clients that keep a sealed envelope at the lawyers office with the will. This sealed envelope contains all the passwords and information to help the executor find information and settle the estate.
Related article: Estate Planning starts by getting organized
Where you keep a sealed envelope or find some other solution, it’s important to start thinking about how to manage all the passwords in your life and figure out how to pass them on to the people who many need them if you are not capable of making financial decisions or if you pass away.
What to do with Social Media
Rochwerg also talked about how social media is impacting estate planning. What do people want to happen to their facebook, linked in and twitter accounts when they die.
Do people want the site as a means to honor their legacy for a period of time? Is it OK to notify facebook friends about the death of the account holder through facebook? Are there liabilities around these issues?
I know my 82 year old father is on Facebook and checks it quite regularly as a means of staying updated on his kids and grandkids. I don’t have a clue what my father wants with respect to facebook so I better have a discussion with him as the executor of his estate.
And what about my social media accounts. I am pretty active in social media while my wife is not. If I were to pass away, my wife would have no clue how to get into my social media accounts. I better start talking to her as well. How many of you have never thought of this? Do you think it’s important?
Loyalty programs and pre-paid cards
The last area that Rochwerg talked about was the area of loyalty programs and prepaid cards. Rochwerg says there is a very small number of people who are thinking about loyalty programs and how they are dealt with in the estate. Some people are including them as assets and making sure they go to a specific beneficiary designated through the will. Most people have not thought about this in any detail.
When I think about my personal situation with my dad and his estate, I don’t know much about what loyalty programs he participates in. I know he has an Air Miles card because he used it when we went to Boston Pizza but other than that, what does he have? How many of these points get lost when someone dies.
Even in my own situation, we have quite a few points. It would be great if the family took a nice vacation together using those points. I should let me wife know that’s what I would like the points to be used for if I die. How would she know if we never had the discussion?
Hard drives of computers
For many of us, our hard drives carries so much personal and sensitive information. What do we want done with these hard drives when we die? Maybe you don’t care and maybe you do. Either way, how would your executors, trustees and beneficiaries know what you want?
The whole area of social media, digital assets and estate planning is evolving at a rapid pace. Rochweg says “There is no norm. Make sure you incorporate these things into your estate plans. Don’t delay 99% for the 1%.” This is great advice from someone who sees the good from planning and the bad from no planning.