When I talk with people about doing estate planning for their digital property—their passwords, online accounts, computers, smartphones, and electronic data—I sometimes ask them to conduct a “digital fire drill”:
- If your computer is lost, stolen, or damaged today, what valuable or significant digital property would you lose?
- If you are in an accident today, can your family and fiduciaries access your valuable and significant digital property while you are incapacitated?
- If you die today, what valuable or significant digital property would you want your family or friends to have?
Clearly, for a person’s digital property with financial value, they should plan how to access it, protect it, and transfer it if the person becomes incapacitated or dies. But don’t overlook digital property with sentimental value.
When a family survives an actual fire, flood, or theft, they probably aren’t regretting the loss of their checkbook register from 2008 (although that may be important). They’re wishing they could recover the video of their son’s first steps and the photos they took at their daughter’s wedding.
With printed photos, negatives, DVDs, videocasettes, and other video formats, copies could be made of the media and stored somewhere safe, but this might be expensive and time–consuming. With digital photos and videos, copies can be inexpensive and convenient. Older formats can be converted to a digital format also—which puts us back in the expensive and time–consuming column, but the digital format gives more flexibility for making and storing secure copies in the future.
Consider using an online storage account to store a backup of your computer’s data in case of fire, flood, or theft. I talked to a family recently who paid over $5,000 to recover the contents of a damaged hard drive. They did not have any valuable business information, intellectual property, or other data of financial value on the hard drive—it was just data with sentimental value. One data recovery service company, Kroll Ontrack, estimates that it typically costs about $1,000 to cover the data for a typical desktop computer. As a comparison, online backup service Carbonite currently charges $54.95/year for unlimited data backups.
Many people save their photos to Facebook or other social networking accounts, and send and save copies of photos in their e–mail accounts. A recent article on TechCrunch reported that Facebook has been averaging 100 million new photos a day, and saw over 750 million new photos uploaded just over the 2011 New Year’s Weekend!
While uploading photos or videos to Web sites can protect against the damage to or theft of your computer locally, remember that a person’s online account might be closed if the person dies or becomes incapacitated, depending on the Terms of Service agreement. Also, sometimes these online accounts encounter problems, which is what happened when over 17,000 Microsoft Windows Live Hotmail users found that their e–mails and attachments were inadvertently deleted in December 2010. Microsoft very quickly restored the missing e–mails and attachments, but you can’t count on that from every online service provider. Sometimes online service companies close down entirely, and sometimes they scale back or shut down services. For example, on December 14, 2010, Yahoo eliminated 600 jobs, and, shortly after, Yahoo announced a possible sale and “exploring a variety of options” for their popular Internet bookmark–sharing service Delicious. Over 5 million users will be affected by Yahoo’s planned changes for Delicious. User accounts might also be deleted for a violation of the Terms of Service agreement, including copyright violations.
The bottom line is to keep in mind what digital property is important, whether that has financial value or a sentimental value, and plan ahead for it.
