Back to InsightsBy John McGee, II, CPM®, COO, Managing Partner & Senior Portfolio Manager
As more of our lives has moved online and assets have become digitized, more financial accounts, assets, and personal information has been stored across multiple digital platforms.
While technology has made managing finances more convenient, it has also expanded opportunities for cybercriminals. Identity theft, account takeovers, data breaches, AI-enabled fraud, and phishing scams can all put your financial security at risk.
Taking a few proactive steps can go a long way toward securing your digital identity and helping to protect your wealth.
Strengthen Your Digital Defenses
Affluent individuals and business owners can be particularly attractive targets for cybercriminals because they may control significant financial assets, serve on nonprofit boards, or have access to sensitive financial information.
A single compromised account can have far-reaching financial and personal consequences. These strategies can help increase your security:
- Use a unique, complex password for every account and store them in a reputable password manager.
- Enable multi-factor authentication, including one-time links, passkeys or biometric verification
- Set up and update antivirus, anti-spyware, and malware software
- Set up antivirus, anti-spyware and malware software on your devices
- Avoid conducting business or personal transactions over public Wi-Fi unless you are using a trusted virtual private network (VPN).
- Review your financial accounts regularly for unauthorized activity.
- Verify unexpected requests for money or sensitive information by contacting the sender through a separate, trusted communication channel.
Protect Your Digital Identity
Identity theft can extend far beyond unauthorized credit card charges.
Criminals may attempt to open new accounts, file fraudulent tax returns, access retirement plans, redirect money transfers, or impersonate you when communicating with financial institutions. Consider additional safeguards such as:
- Placing a security freeze on your credit files when you are not actively applying for credit or a mortgage
- Monitoring your credit reports throughout the year
- Using identity theft monitoring services if appropriate
- Avoiding phone calls that are flagged as potential spam
- Protecting Social Security numbers, passport information, and tax records
- Limiting the amount of personal data shared publicly through social media
The less information criminals can gather, the more difficult it becomes for them to impersonate you.
Separate Business and Personal Interests
Business owners face additional cybersecurity and reputational risks. A compromised company email account or payroll system can lead to financial losses while exposing employees, customers, and partners to fraud and data theft.
Separating work and personal devices, maintaining secure backup systems, limiting administrative access, and training employees to recognize phishing and other scams can strengthen your overall cybersecurity.
Because owners may have both personal and company finances connected through shared accounts, devices, or credentials, a security weakness in one area can quickly affect the other.
Include Digital Assets in Your Estate Plan
Estate planning now includes more than physical property and financial accounts. Your digital estate may include:
- Online financial and investment accounts
- Cryptocurrency holdings
- Digital payment and tax platforms
- Smartphone, computer, or cloud data
- Digital photographs and family records
- Social media accounts and subscription services
- Domain names and online businesses
Start by creating and regularly updating an inventory that documents where digital property is held and how your fiduciaries can locate it. You should also outline your intentions for each asset or online service.
Avoid placing passwords directly in your will, since it may become a part of the public during probate. Instead, work with your advisory team to establish a secure method for storing and updating access information.
Review Fiduciary Authority
Access to your digital accounts and records after your death can be challenging because online services, including email, are typically protected by passwords, privacy laws, and provider policies.
Without clear instructions, your loved ones may face delays or legal obstacles when trying to locate and manage your digital footprint.
In states that have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), access is generally determined first by any online beneficiary designation, then by your estate planning documents, and finally by the provider’s terms of service.
Including digital asset provisions in your estate plan can help ensure your executor and/or trustee have the authority they need.
Coordinate Your Protection Planning
Safeguarding your wealth today means securing both your financial assets and the digital information that supports them.
Ideally, your cybersecurity practices, identity protection measures, and estate plan should work together as part of a coordinated asset protection strategy.
Your financial advisor, attorney, CPA, and trustee can work together to identify potential risks and ensure your financial, legal, and digital strategies continue to evolve alongside changing technology.
Frequently Asked Questions
Should I keep a list of my passwords?
Yes, but it should be stored securely. A reputable password manager or another secure storage method is generally preferable to keeping passwords in your will or in an unsecured document.
Does homeowners insurance cover cybercrime?
Some policies include limited cyber coverage, while others require separate endorsements or standalone cyber insurance. Review your coverage with your insurance professional to understand what risks are included.
What should I do if I think my identity has been stolen?
Contact your financial institutions immediately, change compromised passwords, place a fraud alert or credit freeze with the major credit bureaus, review recent account activity, and report the incident to the appropriate authorities. Acting promptly can help reduce financial damage.
Can a trust help protect my digital assets?
Yes. A trust can provide clear instructions for managing and certain assets, such as cryptocurrency, online financial accounts, digital business interests, domain names, intellectual property, and other valuable digital property.