Many of my friends are professional musicians, just like my saxophonist grandfather.

It’s a tough life. For all but the top few, it means barely scraping by, in exchange for opportunities to do what they really love — opportunities that are diminishing year by year.

Musicians inhabit the same world we do, however, and that means they have all sorts of digital connections.

In fact, they’re more likely than most to use mobile banking, so they can deposit checks from their gigs instantly. They pay their impatient bandmates via PayPal or Venmo.

Ditto for social media … Facebook and Twitter have become the most important means of advertising upcoming shows.

But since the life is hard, and many musicians tend to be … shall we say, a little too fun-loving and irresponsible … they often die relatively young.

They rarely leave behind clear instructions about posthumous access to their bank accounts, social media profiles and other digital assets. That’s why, on more than one occasion, their survivors can wait months — even years — to access those assets. The Facebook pages of several deceased musicians I know are still up because nobody can log in to them.

The same thing can happen to you … and probably will, unless you take steps to prevent it.

Today’s Digital World

In today’s digital world, most of our financial transactions and communications occur online. That world expects us to have email, credit cards, online photographs, websites and social media profiles.

Trying to avoid all of that by sticking with old-fashioned things such as checks and deposit slips is like insisting on keeping an old car … eventually, there won’t be any parts or service available to keep you going.

But each one of these digital assets is password protected. Increasingly, too, these passwords are embedded in multifactor authentication systems, which require access to another device — such as a smartphone, with its own password — to confirm the master password in question.

What happens if you die or become incapacitated, and nobody else knows any of those passwords, personal identification numbers (PINs), access codes and login IDs?

Unless you’ve taken steps to secure your “digital estate,” the answer to that question is: A lengthy period of “digital probate.”

Taming the Digital Wild West

There are no federal laws regulating access to and inheritance of digital property.

Only 29 states have established laws to protect digital assets and to provide a deceased person’s family with rights and procedures to access and manage those assets after death. Even then, the procedures can be complex, lengthy and expensive.

That means it’s up to you to avoid digital probate — by securing your digital estate ahead of time. Here’s how:

  1. Inventory Your Digital Assets: Make a list of all your digital accounts, including login IDs and passwords. Include everything, from bank and brokerage accounts to social media to subscriptions and online shopping sites. A password manager such as Dashlane (my current choice) is very handy here, since it does it for you.
  2. Create an Online Vault: You can use a password manager to store all this information, but chances are there will be some digital assets that need to be recorded separately. That’s why many secure online storage companies provide special tools to secure passwords, identification or login information, and other sensitive data. I currently use SecureSafe, a Swiss cloud storage firm with outstanding encryption protocols.
  3. Create a Digital Estate Plan: This provides clear, specific statements of intent about who will gain access to what information, and covers all your digital accounts and assets, past, present and future. You can and should include this in your will, but you can also take the simple step of giving the login information to your password manager and/or digital password vault to a “trustee” such as a spouse, sibling or attorney. SecureSafe issues a “data inheritance” letter that you can give to the trustee explaining how to access your digital assets with a special code.
  4. Be Choosy About Your Trustees: You may not want to give access to everything to each trustee. For example, you can have one person manage less-sensitive assets such as social media, online shopping and subscription assets, and another manage your financial accounts.

An asset is anything of value that confers advantage to you. Your estate plan surely provides for your financial and real property assets.

Your digital assets are just as valuable as any other … and if you haven’t already created a digital estate plan, now’s the time to do so.

Kind regards,

Ted Bauman
Editor, The Bauman Letter

Editor’s Note: One of the most ignored aspects of security is password safety. In Ted’s Privacy Code 2.0 report, he shows you his method for creating passwords that are too complex for hackers, but not so complex that you forget them. With the right technique, it would take 27 million years to crack your password, even if the FBI, CIA and NSA all joined together to try to hack into your computer. To find out how you can get your free copy of this report, click here.