If you missed last month’s Digital Assets Part I, take a quick read as to why we should be concerned about this area.
As we shared in our last post, Digital Assets can include information stored on an individual’s digital devices (documents, cryptocurrency, photos, movies, music, etc.), content uploaded to websites (photos, videos, social media posts, blog posts, etc.), and rights in digital property (music, movies, e-books, etc.). This encompasses quite a bit of data that is important to us and our families.
So, the question now is: What can we do to help protect these assets?
A complete modern-day estate plan would be remiss if it fails to consider the management and disposition of digital assets upon disability or death. As mentioned as a first step, take an inventory of your digital assets. This will include websites, cloud storage, as well as hard drive storage. You may be surprised as how much of our lives is intertwined with technology. Many state laws address key aspects of how estate administrators can deal with all these digital assets held by a person when they die. In general, Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA):
- Gives fiduciaries the legal authority to manage the digital assets of the deceased.
- Gives custodians of digital assets a method to disclose information to fiduciaries while protecting the user’s privacy.
Next, take a step back and consider how important the information stored this way is to you and your family. What are your goals with regards to these assets? Do you want to be sure only certain things (like photos) are passed down, or do you want a contingency plan for it all? Do you potentially want to grant access to a trusted person in the case of emergency or your incapacity? There may only be certain assets you wish to protect in this way. Working with your estate attorney to update your pertinent estate documents will be important to address all asset, including digital, in light of current laws.
Third, consider how technology can assist. A Password Manager is a site/software that allows access to a vault of log-in information all by way of one master password. While it’s important for a password manager to offer a ton of advanced features, first of all security, it also ideally needs to do so while still being easy to use and not overly complex. Here are a few highly rated programs – all with multifactor authentication and the highest level of encryption available – and their key features that may be worth considering:
- Dashlane – Well designed and executed, Dashlane makes password management truly easy. Featuring a standalone all-platform browser, you can use the service on almost any platform!
- LastPass – Featuring enhanced multifactor authentication choices and 1 GB of secure online file storage, the LastPass free edition is a solid choice. For $48 a year you can get LastPass Family, which features six licenses so your whole family can keep their passwords safe!
- Sticky Password – For those reluctant to store any information in the cloud, Sticky Password offers an unusual and more secure option while still allowing you to sync your passwords between devices: Wi-Fi sync. In this mode, your devices sync directly with each other when they’re connected to the same Wi-Fi network, and your data never goes to the cloud!
Dashlane and LastPass also offer emergency access to a trusted person, which is a great feature as we are discussing how to protect these assets.
For those with cryptocurrency, non-fungible tokens (NFTs) or other similar digital assets, keeping proprietary data and information in the digital/online world should be considered paramount. Like Password Managers, hardware wallets are a key component for those who are a part of the blockchain ecosystem. They provide security and utility when interacting on these platforms. Here are some reasons why having a hardware wallet is important:
- Security – Keep your assets safe even when the computer you’re using isn’t secure. Hardware wallets give you an extra layer of protection against cyber-attacks, phishing sites, and malware.
- Many Assets – One Location. A hardware wallet can work with multiple blockchains simultaneously. This allows you to manage different digital currencies all on the same device. All of them can be backed up easily with a single recovery phrase.
- Convenience – A hardware wallet, often a small plug-in device, is a portable key to access your crypto assets safely from anywhere. A hardware wallet can “log you in” to many Apps without having to create new accounts. You can even use them to log in to regular apps like Google and Facebook.
How they work:
- They protect your private keys
Hardware wallets are often considered cold storage, as they isolate your private keys from the internet, mitigating the risks of your assets being compromised in an online attack.
- They let you sign in and confirm transactions on the blockchain
When you create a blockchain transaction, you’re “signing” a special message. Your “signature” proves ownership of your private key. It is impossible to forge this signature without the key, so no one else can make a transaction on your behalf without it.
Trezor and Ledger are some of the leading hardware wallets available on the market today.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. Information regarding Dashlane, LastPass, Sticky Password, Trezor or Ledger is provided for informational purposes, and does not indicate any affiliation and should not be considered an endorsement of their products/services.