Digital Estate Planning in One Day

June 20, 2016

Recently, a notice popped up when I logged in to LinkedIn asking me if I wanted to endorse my friend Larry for certain skills and expertise. I think so highly of him, and I would willingly endorse him. There’s just one problem. Larry passed away several years ago.

What happens to your digital life when you die? Who can pay your electronic bills, shut off automatic debits to your checking account, and let your Facebook friends know you’re gone or get into your email account? Digital estate planning is the process of answering all those questions in advance, so that your survivors can easily wind down your digital financial presence and continue or discontinue your online and social media presence according to your wishes. A digital estate plan is essential to a well-constructed overall basic estate plan, which also includes a will, guardianship provisions for any minor children, beneficiary selections, an advance medical directive (e.g., living will), and durable powers of attorney for healthcare and finances.

Choose a digital executor

An “executor” is the person who carries out the instructions outlined in your estate plan. You’ll need to identify a trustworthy – and computer-savvy—person to be your digital executor and name them in your will. That may or may not be the same person who is your overall estate executor (who will have final authority over how your wishes are carried out).

Who would you want to control your website, blog or social media accounts after your death? If for some reason they were not available, who would be your backup choice? Make sure your digital executor knows you’ve chosen them as well as whom to contact in the event of your death. Discuss your overall goals for your online presence.

Take an inventory of your digital assets

If something happened to you, what tracks would you leave in cyberspace? Pull together everything in a central list:

Financial:

  • Bank and brokerage accounts
  • Employee benefits accounts, such as 401(k), FSA, HSA, etc.
  • Credit card and loan accounts
  • Other bills you pay online such as utilities, car loan, mortgage or gym memberships
  • PayPal, Apple Pay, Starbucks and other digital wallets
  • Amazon and other retail accounts
  • Cell phone account

Online/Social Media

  • Your blog or website
  • Email
  • Facebook, LinkedIn, Twitter, Instagram, Pinterest, Meetup, Snapchat, etc.
  • Music and video websites (Pandora, YouTube, Vimeo, Sonos, etc.)

Home and Office

  • Security system, heating/cooling, etc.
  • Computer and phone systems
  • Voicemail

Organize and store login information and passwords

This can be nerve-wracking. The best protection against identity theft is not to write your passwords down. Where will you store access information for all these accounts?

Consider a password vault or password manager. This will allow you to create one strong password you can remember and will also prompt you to update your weaker passwords for each of these sites. You would then create a way to get the master password to your digital executor upon your death. Don’t know where to start? PC Magazine compares the top choices here.

In any case, don’t just give the entire account and password list to your attorney to store in their paper files. That is too risky.  Consider an encrypted digital estate planning storage system such as Everplan or Principled Heart. An alternative could be to write them down and then keep them in a safe or safe deposit box. However, make sure your spouse or executor knows the combination to the safe or has the key to the safe deposit box!

Leave written instructions

Take some time to write down clear and comprehensive instructions, especially for websites and social media. What should happen with these accounts if you die? Should they be closed or taken down or maintained in memoriam? Who inherits them? Who manages them?

Check the user agreements of those sites to make sure your wishes can be implanted. Make sure your choice of digital executor is named in your written will. Don’t have a will? Check first with your HR department to see if you have access to a will creation program or legal consultation through a prepaid legal plan or employee assistance program.

Have you created a digital estate plan? What was your experience? Email me at [email protected] or follow me on Twitter @cynthiameyer_FF.

 

Follow These Steps To Stop Making Bad Decisions

March 25, 2016

In a world where things can “live forever” on the Internet, we all need to be careful when posting things to Facebook, Instagram, Snapchat or any other social media platform. A funny, in a not very funny way, example of that happened with the rapper 50 Cent before he appeared in bankruptcy court recently. He posted a photo of himself sitting on the floor with stacks of money spelling out “B-R-O-K-E.” His creditors were NOT amused. (Note to self – when trying to show impoverishment, it’s best to not have a flamboyant display of wealth posted to social media.)

We’ve all made mistakes or put our foot in our mouth or done something to help someone else point out the error of our ways, but this is one of my all time favorites. It’s not quite as colorful as a story in my local paper when I was a kid about a guy who tried to rob a gun store at knifepoint (I’ll let you do the math and figure out how that ended) but the concept is the same. I wonder if at any point before having that photo snapped, 50 thought “this just might be the worst idea I’ve had in a long time?”

Again, we all do silly and not brilliant things from time to time, and I’m no exception. I’ve pushed myself too far too fast when recovering from injuries and ended up needing surgery. The worst part is I knew that surgery could be a result if I didn’t dial back, but I didn’t listen to the little voice in my head that said “this is really stupid!”

This week, I spent the majority of my time talking with people in financial coaching sessions and I heard a lot of people acknowledge that they made very dumb (their word, not mine) financial decisions when they KNEW it was a mistake before doing it. It made me wonder how often that happens and why we do it. Why do we make bad decisions?

I’ll let you read that article and hit Google to do more research, but regardless of the “why,” it’s something we humans do. And I’m noticing it everywhere now. The more people I talk to, the more admit to knowing before they made a bad choice that it was a bad choice. We willingly disregard our instincts and move forward to make regrettable choices.  My challenge to myself and to you:  STOP IT!!!

When you are about to spend way too much money buying something that you don’t really need – don’t do it! When you are thinking about reducing your 401(k) contributions for a short term reason – walk away from your computer and don’t allow yourself to do it! When you are about to buy a car and the payment is almost as much as a mortgage on a small house – be like Nancy Reagan and “Just Say NO”

Prolific business authors Chip and Dan Heath have a book about decision making. Decisive: How to Make Better Decisions in Life and Work is a great read. It goes into the “4 villains” of bad decision making:  1 – Our focus it too narrow  2 – We have confirmation bias 3   – Short term emotions get in the way 4 – Overconfidence hurts us.  If you can understand why you are about to make a bad decision (I recommend reading the book so you get a full explanation of each of the 4 villains), you’ll be less likely to follow through with it.

Where the book gets even better is when it moves from diagnosing why we make bad choices to building a good decision making process.  There are a few simple steps there that we can all use to help us make better choices in life. They call it the WRAP method:

W – Widen your options. Move from “this or that” to “this AND that.” Don’t limit your view.

R – Reality test your assumptions. Try to see the decision from your point of view, the points of view of your friends and family, and people who would disagree with the decision. The more angles you see, the better your decision becomes.

A – Attain distance before deciding. I love the 10/10/10 rule. How will you feel in 10 minutes, 10 months, 10 years about this decision?

P – Prepare to be wrong. Build in time for the unexpected. Anticipate problems and don’t let a bad decision linger.

There is a lot of info packed into each part of the WRAP process. (Here is a great summary of it.) If you are looking for a way to improve your decision making process, whether it’s already good (like I claim mine is!) or if it needs some work, head to your local library (trying to be financially sound) or hit your local bookseller to look for this book. Maybe it can awaken your inner “is this a good idea?” voice. When managing your financial life, slow down, take a deep breath, and try to listen to that voice.

 

 

 

 

Identity Theft Tips From A Former Con Man

September 09, 2015

Last week, while attending the Illinois CPA Society annual conference, I had the privilege of seeing Frank Abagnale, the con artist turned FBI agent on whom the movie Catch Me If You Can is based. He shared some alarming statistics with us about white collar crime and especially identity theft.

Continue reading “Identity Theft Tips From A Former Con Man”

Are You Up To Our 30 Day Challenge?

April 06, 2015

Last Tuesday, President Obama proclaimed April 2015 as National Financial Capability Month and called “upon all Americans to observe this month with programs and activities to improve their understanding of financial principles and practices.” The goal is to “take time to increase our knowledge of our finances and encourage our friends and family to do the same.” He then pointed out the free financial resources available at MyMoney.gov, ConsumerFinance.gov, and 1-800-FED-INFO. Continue reading “Are You Up To Our 30 Day Challenge?”

How Creditworthy Is Your Facebook Page?

March 11, 2014

Wherever you fall on the social media spectrum — between Twitter power user and Facebook holdout — do you know how your social media activity (or lack thereof) is affecting your creditworthiness? If not, it’s time to find out.

What is a social media-based credit score?

In the interest of finding new and improved ways of predicting creditworthiness, the social media-based credit score was born. This is an alternative credit scoring model that includes in its calculations information from your social media profiles, activity, and connections. At its best, a social media-based credit score can help borrowers who would not qualify for loans via traditional scoring models. At its worst, a credit score based on social media can hurt someone whose activity and/or connections are questionable.

Why is social media considered a valid indicator of creditworthiness?

They say the best indicator of future behavior is past behavior. Thus, the value of the traditional credit score is based on how you have handled lines of credit in the past. However, it is absolutely possible and common for people to change their ways. That’s where a social media-based credit score comes into play, basing creditworthiness on character as revealed via updates, job history, and with whom you choose to associate.

Does FICO use social media to tabulate its credit score?

Currently, FICO does not incorporate social media data into its scoring model. In turn, it does not influence your score through the three major credit reporting bureaus that use the FICO model — Equifax, TransUnion, and Experian. However, FICO has not ruled out the inclusion of social media data in the future. Earlier this year, FICO Senior Consumer-Credit Specialist Anthony Sprauve told The Wall Street Journal, “There could come a time where certain social media could be predictive and we’re looking at that, but it isn’t yet.”

Which credit scores incorporate my social media activity?

It was about three years ago when the social media-based credit score first came onto the scene. Since then, a number of small lenders have adopted this alternative scoring model, like Kabbage, Kreditech, and Lenndo.

Which social media platforms are used in a social media-based credit score?

Since there is no universal social media-based credit score, every lender that utilizes social media data does so according to its own unique formula. That said, the most common social media platforms currently accessed include Facebook, Twitter, and LinkedIn.

How are my social media profiles accessed for calculating a social media-based credit score?

Your authorization is required for lenders to access your social media profiles.

What elements of my profile or activity go into a social media-based credit score?

Again, each lender that utilizes this alternative scoring model uses its own unique formula. However, the information that tends to carry the greatest weight includes education, job history, number of connections, quality of connections, and location and seniority of connections. So while you certainly want to be mindful of what you post to your social media platforms, you should be equally concerned that your friends on Facebook, connections on LinkedIn, and the people you’re following on Twitter are doing the same.

What safeguards are in place to ensure the accuracy of a social media-based credit score?

Unlike your FICO score, a social media-based credit score requires no validation. Here’s the difference. The three major credit reporting bureaus each generate their own unique FICO-based credit score. This score is based on the listings within your credit reports, which vary from bureau to bureau depending on which agency your creditors use to report your activity. These listings on your reports are required by law to be verified, not because they are used to tabulate a credit score, but because they are used to tabulate a credit score that the bureaus share with third-parties.

This is not the case with social media-based credit scores as they are tabulated and used by the lenders alone (i.e., not passed on to a third-party). Currently, there is no regulatory body overseeing the social media-based credit scoring model. However, the practice has been noted by the Consumer Financial Protection Bureau as well as the FTC, which is planning a series of seminars on alternative scoring models this spring.

Can current or potential employers access social media-based credit scores?

Since each social media-based credit score is unique to the lender that creates it, there is no universal number for an existing or future employer to access. However, some employers do use traditional credit scores to make hiring decisions, particularly in the finance industry. As for social media, employers are increasingly keeping a watchful eye on social media sites, not only of their current employees, but also prospective ones. For this reason, be ever-mindful of what you post for public view.

Can we expect a future in which social media-based credit scores are the norm?

This is too soon to call, but it’s certainly well within the realm of possibility. So whether you agree with the social media-based credit score or not, it is best to start building an online profile that won’t come back to haunt you. After all, it’s one thing to suffer the short-term, embarrassing consequences of an ill-advised update now and then, but quite another for social media activity and/or connections to have long-term negative effects on your finances.

 

This entry is a guest post by Meredith Simonds, the personal finance blogger for Credit Info Center. Check them out on Facebook. You can follow her on Twitter @creditinfocentr and on Google+

5 Ways to Find Employment in a Down Economy

August 29, 2012

While the economy may be slowly recovering, the unemployment rate remains high, consumer spending is down, and a double-dip recession is a definite possibility. If you’re looking for employment in this environment, you may feel as if your hands are tied. However, that’s just not true. There are, in fact, a variety of effective strategies you can use to find employment in a down economy. Here are some tips to get you started: Continue reading “5 Ways to Find Employment in a Down Economy”