Every business relies on digital accounts in daily operations in one way or another. As the owner of a company, you depend on a bank, bill payment, and other online financial accounts. But what happens if you become incapacitated or pass away?
Suddenly, the business that you have worked to build over the years is thrown into a place of limbo in your absence. Your company ceases operations as they are unable to access financial accounts, pay expenses and order inventory.
This can leave your personal representative or trustee scrambling to gather information and receive authorization from a court because you failed to leave behind specific instructions.
Put simply, including a digital assets clause in your will or trust does not always suffice. Where are your digital assets located? How can your personal representative gain access to them? A trust or will may not address these specific issues.
Here are two things you can do as a business owner for digital asset planning.
Create an inventory of assets
No matter how close you are with your personal representative or trustee, it is unlikely that they have a record of all of your digital accounts.
The first step of digital asset planning is creating a list of all business account information. This can include financial accounts, emails, and social media.
Next to each asset, make a note of the link addresses, respective usernames and passwords and security question answers. Make sure to update this list if you change your account information.
Store your list in a safe place that will be easily accessible to your personal representative or trustee. It can be a good idea to store at least two copies in different locations, such as a safe, with your estate planning documents or an external hard drive.
Execute or update a durable power of attorney
It is critical that you appoint someone who will manage your digital assets in a durable power of attorney in the event of incapacity. Giving your passwords is not always enough. In a durable power of attorney document, trust and will you can specifically authorize an agent who can take over your electronic data.
The best way to protect your company in the event of incapacity or death is by creating a thorough “what if” plan to set your representatives up for success.