Do You Have a CDA Plan?

By David Shayne and Sarah Butters

More and more today, we have online accounts. We pay our bills, send and receive email, subscribe to publications, store photos and use the web to keep track of our bank and brokerage accounts. Many of us have email and social media accounts and even a personal website. How do we keep track of all those user names and passwords? We would probably forget them if we did not keep a list. Ah, but where to keep the list, secure but accessible when needed?

You probably have a will, a power of attorney and a living trust. Those all involve a trusted person or two serving as an agent, executor and trustee (your “fiduciary”). When the need arises because of your absence, disability or death, how is that person going to help you or your family? Is the person you have named as your fiduciary also the best person to manage your digital assets?

There are four key components of a good computer digital account (“CDA”) plan:

  1. Prepare a Digital Asset Inventory – create and keep current a list of your online accounts, digital assets, and passwords.
  2. Secure the Inventory – keep the inventory in a safe place to prevent misuse, but arrange for your fiduciary to have access to it when the need arises.
  3. Select a Digital Fiduciary – select an appropriate fiduciary to access and manage your digital assets in your absence and upon your death or incapacity.
  4. Arrange Access – inform your fiduciary how to find your inventory when you can’t use your computer and authorize him or her in writing to access your computer and electronic accounts with your passwords under what circumstances.

Digital Asset Inventory

The first step in managing your digital assets is to prepare an inventory of all of your online accounts, digital assets and passwords. Maintaining strong passwords for your financial accounts (long ones, mixed letters, numbers and symbols, different for each account, changed occasionally and few dictionary words) is prudent. For example: Fir7tn2meL2stn2me!. In addition, it is equally prudent to make sure you update your passwords and your inventory regularly.

Securing the Inventory

The next step to creating a good CDA plan is safeguarding the inventory. But how? A desk drawer probably is inviting trouble because it is not secure enough. A safe deposit box is impracticable because you will have difficulty accessing it to keep the list current and to ensure your fiduciary has access to it when necessary. A home safe or lockbox is a possibility, provided your fiduciary knows how to access it when necessary.

If you prepare your inventory on a computer, you will want to save it there in order to make updating it convenient. The obvious answer to the safeguarding question is to encrypt the document on your computer. You can accomplish this in Microsoft Word, for instance, by clicking the Office Button and under Prepare, click Encrypt Document. You must then assign a master password to the document, which will be the key to its recovery.

You can also keep your list in an online storage account such as Dropbox or iCloud. In addition, a password manager, such as Lastpass or Dashlane, not only stores your usernames and passwords but also inserts them on demand to open your accounts. There are also online storage accounts, such as Legacylocker and Mypersonaldatasafe that will disclose your records to a verified individual during your life, if you choose, and upon proof of your death.

Selecting a Digital Fiduciary

The most important key to your online asset protection is entrusting someone with access to your CDA. Some trustworthy person needs to be able to obtain the list when the need arises. Just as powers of attorney and revocable trusts grant someone the ability to protect your tangible assets, giving the right person access to your computer codes can ensure that your online affairs will be properly managed when you are not available.

There are unique considerations in selecting a fiduciary to access your digital assets, as opposed to your other assets. For example, the terms of use for many social media accounts, such as Hotmail and Facebook, contain restrictions on who can access your account at your death. Those contractual terms of use may override your ability to name the fiduciary of your choice, or any fiduciary at all. You should review the terms of use for each of your accounts to ensure compliance with those provisions.

Where you can select a fiduciary of your choice, be sure that the person selected is computer savvy. Does your mother even know how to turn on a computer, much less access online accounts? Is the corporate trustee you selected the right one to manage your digital assets? Will a corporate trustee even agree to take on that responsibility? Selecting a digital fiduciary requires careful thought and consideration separate from the roles of other types of fiduciaries.

Arranging Access

Finally, confide in your digital fiduciary how to find your inventory and the circumstances under which you want him or her to take control. A digital inventory is only useful if your fiduciary has prompt and complete access to the digital assets you hope to protect.

Protect Yourself and Your Heirs

As your digital footprint grows and grows, it is imperative that you document it, keep the inventory current and secure and, equally as important, ensure that it is accessible to a trustworthy person when the need arises.

David Shayne is Of Counsel to Holland & Knight in its Chicago office.
Sarah S. Butters is a Partner of Holland & Knight in its Tallahassee office.