Podcast: Preparing for Your Digital Afterlife
[AUDIO INTRODUCTION] Welcome to the Bryn Mawr Trust Wealth Management podcast, providing commentary on what’s moving the financial markets, financial planning, and other timely business and monetary topics. Please welcome your host Jennifer Fox, President of BMT Wealth Management.
[SPEAKER: JEN FOX] Hello, everyone and welcome to our podcast on the digital afterlife. We’re discussing what happens to your digital assets after death. With me today is Lee Poskanzer CEO and Founder of Directive Communications Systems. DCS has become an established and respected authority on the digital afterlife. Lee, welcome, I’m thrilled you’re here to join us today.
[SPEAKER: LEE Poskanzer] Thank you for having me.
[SPEAKER: JEN FOX] So why don’t we get started. And in getting started is before we get to what happens to these assets when I pass away, can we speak for a moment on sharing logins and passwords? So for example, I have friends who have family accounts and manage their finances jointly, even when accounts are in one spouse’s name or another. Is that a problem?
[SPEAKER: LEE POSKANZER] Absolutely. We signed those terms of service agreements, which most of us don’t even read, and within those provisions and those agreements we have very strict adherence to not sharing passwords, to not going in and impersonating account holders. There’s a number of reasons for that. Obviously, it’s very sensitive information in there. Some can consider it private if it’s email or Dropbox, and we may not always want to share that with every individual.
Remember that we have an entire community that we’re sharing information with, and that site owner has an obligation to protect not only you, the account holder, but that entire community. We also know that there is a lot of liability and potential for fraud if we share passwords. If somebody else gets a hold of those passwords while we’re sending them to friends, let’s say, or via email or we’re leaving them on desks at friends’ homes and somebody accidentally gets a hold of those, well, then there’s an opportunity to be broken into for bank accounts and investment portfolios.
And again, some other very important sites, such as Dropbox or Shutterfly that might have family pictures in there or private moments, too.
[SPEAKER: JEN FOX] So that’s the logins and that’s the sharing of passwords, which thank you for sharing because I know there’s probably a lot of folks, even people I know well who are finding that to be news.
[SPEAKER: LEE POSKANZER] Yeah, I would look at password sharing like a toothbrush. Everybody has one, but you don’t want to actually share it.
[SPEAKER: JEN FOX] So let me ask you this question. What does it mean to have a digital asset?
[SPEAKER: LEE POSKANZER] Well, digital assets are very broadly defined and can be interpreted in many ways. The most important are that there are digital files or communications– anything that’s handled electronically can be considered a digital asset or digital communication. And so whether we’re instant messaging a friend, sending an email, or placing an order on an e-commerce site, those are all considered communications and those are all considered digital assets, particularly when we sign on or log on with a username and a password.
[SPEAKER: JEN FOX] So that makes a lot of sense to me why sharing passwords should be like sharing a toothbrush in the sense that I could be giving someone access to an asset that I have. And so it’s a way to protect my asset.
[SPEAKER: LEE POSKANZER] Absolutely. Think about it this way. You don’t want to have opportunities for identity theft or reputation disparagement. The more that we share passwords, the more opportunity we open up ourselves to that. We all have heard the horror stories that we think will never happen to us, but they do where we get in fights with friends or spouses or siblings, and then they become aggressive. And now all of a sudden, there is a lot of danger and a lot of activity that can take place that can create harm for the very assets that we’ve worked very hard to keep private.
[SPEAKER: JEN FOX] So let me ask you a different question around digital assets. So as I’m thinking about this, it’s one thing when I’m here and can change passwords and can manage my own accounts and keep control of who has them, but I’m thinking, I’ve been named as the executor of my parent’s estate. And I know that they have Amazon, I know they have Facebook, I know they have Gmail, but I have no idea what other accounts that they may have. As their executor, how do I protect those assets or even what is my responsibility to protect those assets?
[SPEAKER: LEE POSKANZER] Well, I think first and foremost, while you’re alive you want to make sure that you’ve made very clear declarations on who you want to get access to information. It’s very important that we understand that site owners do not want somebody going into your account and impersonating you. That can lead to a lot of problems and a lot of damage. So what they really want to do is if information is needed, they want to data dump it and then deliver it to a designee.
Now, what we also have to consider is, who do we want to be those designees? I myself have seven different email addresses. One is very business-like that has my personal information. Yeah, I probably want my wife or my fiduciary to have that. Another one is very social that has my original romantic notes to my wife. I definitely want that to go to her. But then there are some earlier ones that may be more with my friends or family or may have hurtful or emotional value to them, and I may want to give that to my best friend because he may know what to do with it.
So we really want to take a few moments and think about, who do we want to get access to what information? It can be a very dangerous thing if we assume that our fiduciary or our executor or trustee should get everything. On multiple levels we have to be careful. One, can they handle the volume of information that they’re going to have to go through in order to identify financial and sentimental matter? So we really have to look at that.
Two, are they the appropriate person to go through it? So if I have pictures in Dropbox and that might be very intimate, I may not want my fiduciary to get them. I may want my spouse to get them or my family to get them. But on the other hand, if I have a Dropbox file that contains accounts receivable statements or appraisals for jewelry, artwork, luxury items, we want that to go to the fiduciary– we want that to be settled with the estate appropriately.
So we really want to make sure that we’re selecting the appropriate individuals that we feel are going to best handle not only the volume, but the sensitivity around the information they may find. We know that certainly instances in particular where emails can be a very dangerous subject, because if the fiduciary, let’s say, is my brother-in-law and I have a spouse who’s his sister and I have an email with somebody that I might be sharing private moments with that might not be pertinent to the marriage, it can really open up a can of worms if the fiduciary, who’s the brother-in-law, sees it.
[SPEAKER: JEN FOX] Well, and emails are always subject to so much interpretation that something that may have been intended as innocent may not come across as innocent in the case of a brother-in-law seeing something about a sister.
[SPEAKER: LEE POSKANZER] Exactly. And the areas which we need to focus in on are really emails and online storage, because they have a lot of information. Emails in many instances contain details about investments. And while most investments are pretty obvious with investment brokerages and banking institutions– but there are many collectors out there who may collect stamps or may invest in games, or even have the new cryptocurrency.
Well, information can be sent to email addresses that may, in many cases, fiduciaries and spouses don’t even know about. It’s not uncommon for us to hear in our business, oh, my wife has no idea about these email addresses or that Dropbox account. But yet, they designed their estate or their plans to have some hidden surprise money so that their spouses are taken care of. We’ll come to find out if you don’t know about the email addresses or how to access those surprise accounts to the estate, those accounts don’t even exist, and then the goal is actually destroyed.
So we really want to pay attention to those accounts that really, not only have the asset themselves, but also carry information about other assets that may exist. And we have to be very aware that when we sign these terms of services– going back to the earlier question– we don’t always know what’s in those accounts. And those site owners have to protect your privacy.
And unless an estate can prove beyond a reasonable doubt that there is financial matter in there or that it’s a necessity to the estate, the website owner is not going to allow somebody to go fishing in there and going through your most private and personal moments to see if something exists. So we really want to call that out. We really want to make those directives known on an account by account specific level.
[SPEAKER: JEN FOX] One of the questions that I’m thinking about as you’re sharing this is that I think of email– and you gave the example that there might be evidence of other accounts in email, which is why you would want to see that. But what if you don’t make provisions for your email or if you just say, you know what, I just want to shut it down and don’t want anybody to see it? What’s the loss to an estate? Or is it a different digital asset that would have a loss if you didn’t make plans?
[SPEAKER: LEE POSKANZER] There are many instances where email plays a role in a lost financial matter– and sentimental matter, for that. You bring up the question about seeking information, but then you also mentioned closing the account. And I want to make it very clear, there are two types of directives people have to be concerned with. One is the informational directive. That is seeking out logs or seeking out information that may lead to assets or going through files that need to be vetted so we can find financial matter.
That’s an informational directive. That’s the one that is most concerned with federal law, state laws, and even the terms of service when it comes to disclosure of an account’s contents. There are other directives that we call action oriented directives. And that’s to close the account, delete the account, remove your name from a family share plan, in case of Facebook, to memorialize or set up a digital legacy content manager. Those are action oriented directives. And so really, you want to make sure both directives are known.
[SPEAKER: JEN FOX] So how do I make these directives? Is it just something that’s in my will? Do I have to go back to a provider? What are the steps to make that known?
[SPEAKER: LEE POSKANZER] Depending on the state you’re in– and right now, 42 states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act.
[SPEAKER: JEN FOX] That’s a mouthful.
[SPEAKER: LEE POSKANZER] I was going to say, from here on out, we’ll call it RUFADA. There are certain protocols and priorities in terms of recognizing what those directives are. First, if a site owner, like Google or Facebook, has a proprietary account holder option, that will always take precedence, even over what you put in your estate documents.
Second would be either to line list in your estate documents account by account what you want to do. It’s very difficult to do because you have to remember all your accounts, and then you have to really update your estate documents each and every time you enroll in a new account, because you want to make sure you have those available. Or you can use a third party system, like Directive Communication Systems, where we aggregate all that data, streamline the process, and have even automated it so that you can add your accounts going backwards as well as looking to the future, making it easy to add more accounts to your portfolio as it grows. And there you can make the directives known based on the options that are available.
The last option, which has seen some success– not complete success because site owners are starting to decline requests, but that is to set up a digital executor provision in the estate documents. The problem is that digital executor provision needs to be extremely detailed, extremely specific, or else it can get declined. What site owners want to know is, what is the account holders intent, not what is an assumption of an executor of what the account holder wanted to do.
And while we may think that’s a minor, nit picky issue, it’s really a very large and exorbitantly protected issue with our privacy policies. And I would also say that we want that privacy while we’re alive and site owners want to make sure that privacy is protected even after we’re gone.
[SPEAKER: JEN FOX] So it sounds like the conversation that I need to have with my parents today is first, how have they worked with their attorney to set up some of these provisions? Because it sounds like their attorney really needs to know what they’ve planned for, whether it’s the direct access, like Google and Facebook that you mentioned. But it sounds like there’s other provisions that they should really be in communication with their attorney about.
[SPEAKER: LEE POSKANZER] Absolutely. We’ve been doing this for a number of years now and we’re starting to see attorneys speculate what they think will work versus what actually is working. And I understand why they’re doing that. This is a new area. Technology has really exploded in the last 20 years. Attorneys, in general, have been doing their routines for many years, and here comes a new type of asset that is shockingly innovative.
Not only do we have a growth in the number of accounts that we have– the average person today has over 150 accounts and that’s going to grow by a third in two years to over 200, but we also have new types of financial matter that attorneys have not needed to protect before, such as cryptocurrency, such as virtual collectives. There is gaming as well.
We have personality and profiles that we want to protect. For example, in the state of Texas, they had a case a couple of years ago where a Facebook profile was deemed actually the property of a business, even though it was under the founders personal name. And when he sold the business, his personal profile actually had to go with the business. So it’s really a challenge to trying to figure all this out.
And we respect that attorneys are trying to do the right thing, but unfortunately, some of these are not going to comply with the terms of service that we sign. And thereby, when the time comes, they’re going to get rejected. We know of an individual, for example, that her attorney didn’t advise her about domain names. And she was very lucky enough to buy a domain name back in the ’90s with her initials– nobody thought it was going to be a big back then. If you remember, oh, the internet and the world wide webs– they’re going to be a trend.
[SPEAKER: JEN FOX] [LAUGHTER]
[SPEAKER: LEE POSKANZER] She bought this and she bought it for personal use, not for a business use. And she’s been offered almost a million dollars for it. And so when we spoke to her, we asked her, did she contact the attorney? And she said, no, I thought it was just like a car or a house and it’ll just be transferred. Well, the reality is, she doesn’t actually own that domain name. She subscribes to it every year, as most people do, and if that subscription expires, the domain name goes back into the pool, her family is out almost a million dollars, and I’m sure that there could be some follow along to the attorneys for not taking care of the financial matter appropriately.
But they’re learning– the lawyers are learning. And in some cases– and I would highly recommend this to anybody who’s listening– push your attorney a little bit further, find out if it’s speculation or what they’ve done has actually worked. We know at Directive Communication Systems that our program has worked and our program has been built with input from Google, Facebook, and AOL so that we comply with all the laws, we comply with the terms of service, and we comply with what that account holder’s goals are.
[SPEAKER: JEN FOX] Lee, your example of a domain name is fascinating, because I don’t know that I would have thought that a domain name would be worth a million dollars. So for all of us who remember life pre-internet, what have you found has been some of the more surprising examples of digital assets where folks think that, oh, I just log in here or I do something that’s actually turned out to have real value?
[SPEAKER: LEE POSKANZER] Oh. Well, one of the ones that surprises me greatly and I still– I love it, because it shows where our community is going. But senior citizens who are retired, I have found, are going to garage sales, buying all types of items, and reselling them on eBay. And they’re making $80,000 to $100,000 a year doing this. And it seems to be an amazing business model, because it keeps people energized, which is great about lifestyle, keeps them youthful, gives them a purpose, as well as it helps to make sure their bills are covered.
And so that one is a real surprise to me how the internet has affected our lives. It’s given people excitement to live and to find things and be curious. I can definitely say the advent of online games is very interesting, that people are buying and paying a lot of money for virtual collectibles and games. So virtual swords, virtual cloaks. We know that there is a game where a virtual planet was sold for $6 million.
[SPEAKER: JEN FOX] A virtual planet?
[SPEAKER: LEE POSKANZER] A virtual planet.
[SPEAKER: JEN FOX] So I can’t touch it, I can’t live on it, but it’s a virtual planet?
[SPEAKER: LEE POSKANZER] That’s correct.
[SPEAKER: JEN FOX] OK.
[SPEAKER: LEE POSKANZER] But you can virtually go on vacation there and you can virtually pay– no, you can actually pay someone to go on a virtual vacation. So you have a lot of assets that people aren’t aware of. There’s also our own personal memories. So more and more people have their photographs in Shutterfly or in Dropbox.
And because some of those may be great for families, but if nobody knows that they exist or knows that they need to come out and be distributed to Uncle Bob and Auntie Jane, they may just literally disappear. And what you’re seeing are legacies literally evaporating. So if I scan in my grandparent’s identification card from when they came to Ellis Island and I’ve kept it on Shutterfly and I don’t tell my wife about it, nobody’s going to ever find it for the future.
[SPEAKER: JEN FOX] And because the anniversary reminder that you often get for Shutterfly of “remember this five years ago– seven years ago” is going to go to an email address, they might not even see the email if they haven’t looked at it.
[SPEAKER: LEE POSKANZER] Exactly. And that’s how it becomes one big vicious circle of communications that get lost within each other.
[SPEAKER: JEN FOX] We need this talk– the digital afterlife and we’ve spent a lot of time talking about digital assets and things like that. But how does social media impact or correspond to this conversation? Because yes, there is a password and a log in on that, but how can that have an impact on after life?
[SPEAKER: LEE POSKANZER] Well, we’ve changed our entire approach to how we socialize with friends, family. We completely have lost touch with a telephone. We’ve gone really into smartphone, into texting each other. And we get a lot of information from Facebook and some of the other social media as well. And it’s played a significant role in actually how we handle the death of a loved one.
I just returned from the Digital Legacy Conference, if you can believe it or not, and there were some stories there of experiences that created hardship among family members and friends. The first one that comes to mind is there was a woman whose husband was killed in a car crash. And the hospital was trying to reach her and finally got a hold of her via a regular phone, and she started to head towards the hospital.
Meanwhile, somebody had posted the accident on Facebook. And so by the time she arrived at the hospital, there were about 45 to 50 friends waiting in the waiting room. And she walked in and not knowing what was happening– she hadn’t spoken to the doctors yet, but she knew something was up. Imagine the emotional hardship she went through with people having a very good intention of trying to be there for her, but at the same time, not giving her the amount of privacy or the ability for her to speak with the doctors directly and learn first.
And so social media plays a very big role in how we communicate with each other. Another scenario that we heard that you want to take into consideration when you’re doing your plans is where a mother of two children passed away– adult children. And the brother said to the sister, please don’t put mom’s death on Facebook, I don’t want to have it up there. And the sister said, OK, and agreed to it.
However, the funeral home posted the obituary and information on their website. A family friend picked it up from there and then posted it not only on her Facebook timeline, but also the daughter’s Facebook timeline. And now the brother who made the request “do not post” saw it up there, and it was a very big, ugly fight between the two siblings, because he thought she did it and she wasn’t even aware that it was posted on her timeline until the brother told her. And so there was a lot of arguments going back and forth.
We have to be much more aware that communications travel much quicker than in the past. People really don’t look in the newspaper as much as they used to. They really turn to electronic means to learn about information.
[SPEAKER: JEN FOX] So as you’re thinking of your last wishes, incorporating what you want published or not and where or where not could be critical steps to add as well.
Absolutely. And you want to talk to your funeral home director if you’re doing pre-funeral planning. Because they’ll know what to do and how to walk through it. And again, different generations have different expectations. So for example, when my mother passed away, I did post it on Facebook, and my older brother did not want me to do so, but I wanted to.
And it’s because of that Facebook posting that I had friends from California come to Albany, New York and fly in for the funeral the next day. Had they not seen anything on Facebook, they would not have been able to attend. So there’s some good out of there, and then there’s some bad. You just have to be aware of what you want and make your wishes known to your family and friends.
[SPEAKER: JEN FOX] So I’ve seen this of friends of our family and folks that I know who have passed away. They’re still alive on LinkedIn and Facebook. How do families handle those living profiles or what does Facebook do or what does LinkedIn do after you’ve passed away with your public profile?
[SPEAKER: LEE POSKANZER] This is one of the most frequently asked questions that we receive and, in fact, it’s the reason why I started my company. I went on to LinkedIn about three months after a friend of mine died. He died very suddenly and it wanted me to congratulate him as being a ski instructor up in New England. And I knew that not many people knew he had passed, but that was one of those anniversaries that you want to congratulate somebody on.
And all I could picture was somebody calling the house and his 10-year-old daughter picking up the phone going, daddy’s dead. And you can only imagine the emotional burden that this young girl would go through, the mother would go through, time and time again explaining, and the awkwardness of the caller who didn’t even know that something had occurred– they were innocently just trying to reach out and felt like that there was a big problem here.
So our company tries to solve this issue by doing what the account holder wants to do. They may want to leave it up there so that family members who are OK with anniversaries– they want to be reminded, they want to have memorialization, they want to see pictures. But there are other families who react very differently and friends who react very differently. They may not want to see that anniversary, they may not want to be reminded because it’s very hard.
So these sites can be contacted to have information taken down. Now, the process can be very onerous, it can be cumbersome, it can be long, in many cases it can be frustrating. We know of an individual who tried to do that for– I think it was at least six months to finally get Facebook, unfortunately, to pull it down. But it is getting easier. They’re working on these matters. Again, we have to look at– websites and website owners are generally very new in the market.
These are innovators who are in their 20s and 30s when they invented something. We all look at Mark Zuckerberg as a creator of this wonderful Facebook, but probably when he was doing it– probably one of the first 10 priorities was not, what happens if my account holder passes away? The people who are creating these things are not thinking about death and so it’s become a little bit of an afterthought. And only now are we seeing organizations really take a good hard look at this.
And I give kudos to Facebook and Google and to some of the others that have put into place processes and account holder options. However, there are still a vast majority of websites that still don’t have formalized operations or process around this, and you could still find that they are going to be problematic. Just know that it’s not out of intent, it’s really just trying to figure things out.
[SPEAKER: JEN FOX] So you and your company are really focused on helping clients manage that digital profile, that digital footprint. As we wrap up this podcast, what would you recommend as top priorities for clients who are listening to this of how to start working through that digital roadmap?
[SPEAKER: LEE POSKANZER] Sure. First, I would say that our company, Directive Communications, which is at DirectiveCommunications.com, really helps to streamline the process. And rather than trying to navigate 150 or 100 different accounts, we aggregate that information. So it’s all in one place so you don’t have to go to different website owners and try to figure it all out. We also know that attorneys are trying to do the right thing. And we become a provision in your estate documents– we have all the language written for your attorney so you can easily add us into your estate documents.
So in terms of the overall preparation, an organization that can help you with proper planning and preparation, like DCS, is available to you and I highly recommend that. I would also look at some of the things that you can do as you’re thinking about what you want to have done with your digital assets. Consider the volume of assets you have. How many do you have? Think about which ones are important that have to be vetted and gone through, such as online storage, emails, games, gambling, things of that nature.
You want to make sure who’s going to see what and can they handle it emotionally? You want to take into account other aspects, such as how technology advanced is your home? Is your heating tied to one person and that voice of one person? Is your refrigerator, your air conditioning– it sounds ridiculous, I know. But more and more homes are set up for technology and voice commands. And if the wrong voice is trying to give a command– if you die in January, your home might be cold for another couple months. I say that in jest, but we might actually get there.
[SPEAKER: JEN FOX] Alexa might not be listening.
[SPEAKER: LEE POSKANZER] Alexa might not be listening. So you want to look at the volume, you want look at the types of accounts you have. You want to consider what the privacy is for those accounts– what are the policies? If you do own cryptocurrency, you not only have to be concerned with the accounts being visible, but making sure you have the security and the technology that the heirs have so they can absorb the cryptocurrency and have it done in a proper and efficient manner.
There is so much advice that we could give on digital assets that I think the priority is for you to think about what you actually want, not just assume it’s going to happen on its own.
[SPEAKER: JEN FOX] Lee, thank you for sharing that, because I think as executors and as trustees at Bryn Mawr Trust, this is something that we want our clients to pay particular attention to and get really solid advice both from you, as well as attorneys and all of us as advisors working together to make sure that there’s that smooth transition into the digital afterlife. So Lee, thank you so much for joining me today. This has been a fantastic and informative conversation. And we encourage folks to reach out to you directly for any additional questions.
[SPEAKER: LEE POSKANZER] Thank you for having me.
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