My name is Mark Goodfield and I am a tax partner and the managing partner of Cunningham LLP in Toronto. This blog is about income tax, business, the psychology of money and investing topics and is meant for taxpayers no matter their income bracket, but in particular for high net worth individuals and entrepreneurs who own private corporations. I also blog about whatever else crosses my mind; I have to entertain myself. This is my personal blog and the views and opinions expressed in this blog do not reflect the position of Cunningham LLP. I am blunt and opinionated (at least for a Chartered Professional Accountant). You've been warned.

The blogs posted on The Blunt Bean Counter provide information of a general nature and should not be considered specific advice, as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Tuesday, May 29, 2012

Memory Overload, Alzheimer’s and Death in the Digital World

About a year and a half ago, my wife who is an avid reader, kept telling me about a book she was reading titled “Still Alice” by Lisa Genova. Eventually I became so intrigued, I read the book. This bestselling novel tracks the tragic decline of a brilliant 50-year-old woman suffering from the early onset of Alzheimer’s, the impact on her family and the decisions she makes, once she accepts the reality of what is happening to her. If you have not read the book I suggest you read it. It is both disturbing and thought provoking.

After reading the book, I recommended it to a service provider of mine. This person read the book and one day we discussed it. Our discussion veered off onto how hard it is for a person with full capacity to remember all the electronic passwords we are required to set up in this day and age (assuming you do not use the same password for all your financial and social sites; which is frowned upon by most computer security experts). As our discussion progressed, we considered the nightmare it would be to deal with all the electronic banking, billing, etc. if god-forbid we developed Alzheimer’s as Alice did in the book.

The discussion took an unexpectedly darker turn, when the person told me that they had a huge issue recently when a family member had passed away un-expectedly at a fairly young age, and since that person was computer literate, much of their world was digital and no one had a clue as to the electronic passwords of the family member.

The above discussion revealed three different scenarios that can arise in this electronic and digital era:

(1) You have full capacity but just cannot remember all your passwords;
(2) Your capacity begins to diminish whether through Alzheimer’s or just old age;
(3) You or a family member passes away, and you or a family member as executors must deal with electronic and digital records for which you have no access and whose existence you may not even be aware of.

Personally, I have completed an information checklist so my wife is aware of the assets we have. I have also made sure she is aware of our more important financial passwords. As someone who is by no means a computer whiz, I surfed the web to see what others were recommending or suggesting in regards to these various digital issues, and came across a Forbes.com article titled Six Ways To Store Securely The Keys To Your Online Financial Life by Deborah L. Jacobs, who is a lawyer and journalist.

 Some of Ms. Jacobs’s suggestions to secure your financial online life are as follows:

Use an electronic password manager


Ms. Jacobs noted there are a number of services that allow you to enter all your passwords into a single database and lock them up with a master electronic key. You (or your agent) only need to remember one password to access the list. In her article, Deborah notes the free service LastPass; however, there are several other services available.

Ms. Jacobs also suggests you can back up onto a USB flash drive, which becomes a mini encrypted vault with a password of its own. She notes the drawback is you must find someplace secure to store it.

Using either a USB flash drive or password service, addresses situation #1, where you have full mental capacity, but are just suffering from password overload.

Rely on a digital gatekeeper


Ms. Jacobs’s notes there are several new services, aimed at people who are doing estate planning, that charge a monthly or yearly fee to store the digital data that you enter, and release it according to your instructions. 

In an article titled “Where Are Your Digital Assets?”by Paul Fensom on the All About Estates Blog, he notes three new firms that have come onto the scene that help individuals protect and transfer their digital assets. Those being iCroak , Entrustet and Legacy Locker.

I took a quick look at these websites, and all appear to be small start ups. I have no recommendation on whether you should use these sites or not; I am just making you aware of their existence. Mr. Fensom also just noted these sites without providing an endorsement.

In any event, these sites or others that are developed in the future (I would suggest eventually the large trust companies will develop something similar) are probably the wave of the future and would address situations number #2 and #3.

Old School Solutions


Finally, Ms. Jacobs suggests two “old school” solutions: (1). Enter vital information in a loose-leaf or notebook and (2) use an old-fashioned lock box. 

I would suggest that both these solutions are probably used in some manner by many people, but are not exactly state of the art and have inherent security issues.

As I stated earlier, I am far from a computer security whiz. The intention of this blog post is to bring attention to the various electronic and digital issues noted above, and to make sure if you have not already addressed these issues in some manner, you consider doing such.