Digital Estate Planning

Many of us use online services for much of our financial lives.  For example, I just wrote a check the other day and realized that I had not written a check in over a month.  Like most Americans, I pay my bills online and deal with my financial accounts online.  Each account comes with a username and a password and, for security purposes, the usernames and passwords are not all the same.

This article from The Seattle Times points out just how important it is to make arrangements for digital access to your accounts in the event that something happens to you.  This article makes a great representation:

Digital-savvy estate planners advise clients to take three basic steps. First, do a complete inventory of all digital accounts and assets so that your estate administrator will know just what you have of potential value (or liability) and where it is. Second, assemble a list of all passwords. Third, select a fiduciary and give them the proper power of attorney to administer your estate.

I often counsel clients on the importance of making sure that the documents they spend money to create are of little use if nobody can find them.  The same is true with your digital information.  If the person whom you designate as your attorney-in-fact (which is the name for someone exercising powers under a power of attorney) is unable to access your online accounts, the power of attorney might not be very helpful.