Pub. 3 2013-2014 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S January • February 2014 19 visit us online! www.coloradobankers.org www.coloradobankers.org Providing good advice to a bank’s customers is a vital service, but the role of the bank is changing. The world has altered a great deal even when you compare it to how things were as recently as 20 years ago. Bankers are just like the people in every other business. They need to adapt to the future and fill developing needs. The next few years are bound to continue changing many things we take for granted. Bankers who offer trust or financial planning services are often key players in aspects of estate planning. That means the digital ones, too. As a society, we are covering new ground, and as a result, bank customers need a team of experts, including bankers and lawyers, who have the training and developed in- stincts to safeguard every aspect of an estate. Planning is particularly important because it isn’t like there is a one-size-fits-all solution. Every company has its own concerns about privacy and its own rules for handling information. Since the whole idea is to delegate important decisions to trusted indi- viduals, enabling them to tie up loose ends, that means someone needs to have Power of Attorney for managing assets. In some cases, though, it may also be necessary to appoint a Digital Executor whose duties are tied specifically to deleting or dis - tributing online assets; for example, a bank customer may have a trusted individual who is in charge of almost every aspect of an estate but who just doesn’t know enough about digital estates to knowwhat to do. A bank customer will ideally select someone who has the chops to handle both traditional estate planning and a digital estate. Experienced bankers will make sure that such a person is available at the bank. A Little Background Everyone knows that the Internet has changed everything having to do with information. As always, however, laws are slow to catch up. These matters are generally decided on the basis of individual company policies, and not by a set of state-level or federal-level guidelines. What the U.S. needs, but does not yet have, is a unified ap - proach for handling digital information after the death of its rightful owner. As of February 2012, only a handful of states had laws to govern digital asset management: Connecticut, Idaho, Indiana, Oklahoma, and Rhode Island. That doesn’t mean the laws are current. The 2005 Digital Assets Law in Connecticut, for example, is now eight years old. In a world where you get new Apple products every four to six months or so, these laws are now dinosaurs. For example, the law in Connecticut doesn’t deal with online bank accounts, blogs, social media websites, or accounts for sharing photos. You can’t assume that a company’s policies are necessarily going to be what the information’s owner would have wanted, or that matters will be settled in a timely way. Yahoo was taken to court in 2005 because it refused to give login and password information to the family of a Marine who had been stationed in Iraq when he died. The court mandated release of the informa- tion, which is good, but that means the family had to go to court in the first place. Anything having to do with court is expensive. How many families can afford to fight that kind of fight? How many families have pockets as deep as Yahoo, Facebook, or Twit - ter? By working with a banker and a lawyer, it may be possible for a bank customer to avoid the legal fights that can occur when someone (because of health issues or death) cannot handle estate problems directly anymore. Another example, having to do with timeliness and, again, involving Yahoo, came up when Karin Prangley, an estate plan - ning lawyer in Chicago, tried to act on her father’s behalf after he had a stroke at age 62. In particular, she needed access to business records contained in her father’s email account. She was fortunate, in that she was qualified to take the matter to court to get access, but even with her expertise, she wasn’t able to get the courts to move fast enough. The company went out of business because of the inevitable delay. In her case, the delay was only one month, but one month was enough. Could a bank have provided banking information, including at least some business records, as well as the necessary cash flow to keep the business going? It’s possible. Advance Preparation The most significant way a banker and a lawyer can help someone is to make some advance preparations. For example, there are companies whose business consists of storing online account names, passwords, and directives for how clients want to handle their assets after they are incapacitated or die. It might be difficult for a customer to knowwhich companies are reputable. Are they going to go out of business next week, or  DIGITAL LEGACY  continued on page 21