When creating an estate plan, it can be easy for people in Virginia and elsewhere to overlook digital assets. Traditionally, estate planning is not set up to accommodate the newer existence of online accounts, and best practices for online security say passwords should never be shared. However, estate administrators or family members may need access. The problem is not just one of personal finances either. After the sudden death of the owner of a cryptocurrency exchange in December, it was revealed that the password had not been shared. The clients, who have a total of $190 million in investments, may never recover their cryptocurrency.
A person who needs to make sure one or more people have access to his or her digital accounts basically has three options. The most insecure route is to simply share passwords with those individuals. The drawback is that this would require writing down the passwords if there are many of them. Another alternative is to write down the passwords but place them in a safety deposit box. While this keeps them safe, it can be difficult to keep the list up to date since every password change would require revisiting the safety deposit box.
A digital wallet may be the best solution. It keeps track of all passwords, so the user needs only a single password that can be memorized by the executor or other trusted individuals.
Dealing with digital assets does not just mean granting someone access to online accounts and investments. Digital assets may also include social media accounts, photo sharing sites and more. The challenge with these assets may go beyond passwords because some of these sites might have terms of service that forbid anyone other than the user to access the account. Therefore, people should make sure they understand the terms of service and have adequate provisions in place to deal with all online accounts.