Estate Planning and Your Digital Assets

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If you are reading this post, and I’ll assume you are, you have digital assets. I learned this first hand while handling my step-mother’s estate. Apart from who would run this blog in my absence, I’ve never really given any thought to how my wife or children would access my online life. And then I obtained a four-page, single-spaced list of my step-mother’s online accounts, usernames, and passwords.

Talk about an eye-opener (and the fact that she subscribed to the magazine Garden & Gun brought a smile to my face and a tear to my eye). It hit me just how much of our lives are online. And I also realized just how lost my wife would be if I didn’t do some basic planning to help her handle these “digital assets.”

To give you an idea, consider whether any of these categories of online assets apply to you–

Social Media Accounts: Facebook, Twitter, Google+, and potentially dozens more.

Email Accounts: Many people have multiple email accounts.

Online Banking: Whether your bank exists only online or not, you likely access your accounts online with a username and password.

Investment Accounts: Many access their 401(k), IRA and other investment accounts online. On top of that, I have accounts with LendingClub and Betterment, which are entirely online.

Other Financial Products: You may access online everything from your credit cards to cell phone service to credit monitoring service.

Rewards Programs: My step-mother had frequent flyer reward programs with online access.

Online Entertainment Accounts: Netflix and iTunes come to mind.

The list could certainly be longer–think eBay, Zappos, Flickr, Pinterest, and countless others.

And the list gets even longer for small businesses. So much has moved to the cloud, and many business run everything from invoices (FreshBooks) to accounting (Outright) online.

The Problem

If a loved one dies without any records of their virtual life, those that are left behind have at least three problems to deal with.

First, you’ll have to identify the deceased’s virtual property. This may be easy for things like Facebook and some email accounts. But how will you know if and when you’ve identified everything? The fact is you won’t.

Second, even for those accounts you do identify, you’ll have a terrible time trying to get access. For example, try getting the password for a deceased’s Facebook account. Good luck!

And third, having certain passwords will just make your life much easier as you deal with the estate. I’ve found that to be true with my step-mother’s estate. For example, having her list of online accounts and passwords has helped me identify assets and debts.

There are plenty of news stories about folks dealing with missing passwords. Here’s one story about a couple who lost a son, and then had to do battle with the likes of Facebook and Google to get access to his online accounts. And here’s an article from the WSJ about tips for how a small business should handle its virtual assets.

There’s also a great blog called Digital Passing that is worth checking out. Attorney Jim Lamm of Gray, Plant and Mooty is the editor. I’m not familiar with Mr. Lamm or his firm, but I’ve found his articles on this topic to be thorough and extremely helpful.

How to Plan

The simplest solution in my view is to keep a typed list of your online accounts and passwords. The list needs to be kept in a secure place, of course, but it’s the easiest way to give your family the information they need if you pass away. That’s what my step-mother did, and it’s been a big help.

If you want a more refined solution, however, there are other options. Two options I’ve found are Legacy Locker and SecureSafe. One great feature about Legacy Locker is that you can assign different beneficiaries to different online assets. For example, you may want to give control of your business virtual assets to a business partner, and your personal online accounts to a spouse.

Note that these services are not free. Legacy Locker does have a free version, but you are limited to 3 digital assets. Otherwise, it costs either $29.99 a year or a one-time fee of $299.99.

Don’t Wait

My number one piece of advice in all of this is do it now. Whatever approach you take, make sure the right person has access to your online world should you die. And while you’re at it, make sure you have the necessary access to your loved one’s digital assets in case the unthinkable happens.

If you’ve had personal experience with these issues, please share your experiences in the comments below.

Published or Updated: October 10, 2012
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Marty says:

    Thanks for this bit of advice. It was a great reminder for me. I just contacted my mother to ensure she had all this available for her and my terminally ill stepdad. This will make it much easier to close all those accounts and ensure his estate is handled easier.

  2. Alan says:

    Several years ago my aunt passed away – ending a family line. With no parent/spouse/children to administer the estate, it fell to her niece and nephews. I drew the straw. My aunt was a hoarder. We spent weeks going through piles of paperwork. We found over 40 insurance policies and had to contact each one to verify if they were active or not and if they had any death benefits. We found undeposited checks issued up to 9 years ago – that was a challenge to get those reissued. Her income taxes were not done for the previous 7 years – the IRS is just about as hard to deal with after you die as they are when you are alive. It all got done – probably took over a couple years – I do not exactly remember. As for me, I have all my stuff, including account numbers, logon id’s and passwords, etc… on the computer and printed out in the safe. Don’t forget to include your contact info for bosses and HR from your employment – who is your spouse going to call if you die suddenly to get your life insurance claim going. My point of advice to all readers – you and I are ALL terminally ill, although we may or may not be sick. Unless you are a modern day Moses, you will die. Get you stuff together and go over it with your spouses and even your adult kids. It’ll be difficult enough for them when you move on down the spiritual highway without your loved ones needing to worry about your exhaust fumes.

  3. Alan says:

    Several years ago my aunt passed away – ending a family line. With no parent/spouse/children to administer the estate, it fell to her niece and nephews. I drew the straw. My aunt was a hoarder. We spent weeks going through piles of paperwork. We found over 40 insurance policies and had to contact each one to verify if they were active or not and if they had any death benefits. We found undeposited checks issued up to 9 years ago – that was a challenge to get those reissued. Her income taxes were not done for the previous 7 years – the IRS is just about as hard to deal with after you die as they are when you are alive. It all got done – probably took over a couple years – I do not exactly remember. As for me, I have all my stuff, including account numbers, logon id’s and passwords, etc… on the computer and printed out in the safe. Don’t forget to include your contact info for bosses and HR from your employment – who is your spouse going to call if you die suddenly to get your life insurance claim going. My point of advice to all readers – you and I are ALL terminally ill, although we may or may not be sick. Unless you are a modern day Moses, you will die. Get you stuff together and go over it with your spouses and even your adult kids. It’ll be difficult enough for them when you move on down the spiritual highway without your loved ones needing to worry about your exhaust fumes.

  4. This is a great informative post. As you pointed out, many don’t think about this stuff. I made it a point to put all of my documents in a safe, along with usernames and passwords to websites. I then emailed my sisters so that they know where the safe is and what to expect to find in it.

    But I am still guilty….I never thought about my blog until I read this post. Time to update my list!

  5. This is a great informative post. As you pointed out, many don’t think about this stuff. I made it a point to put all of my documents in a safe, along with usernames and passwords to websites. I then emailed my sisters so that they know where the safe is and what to expect to find in it.

    But I am still guilty….I never thought about my blog until I read this post. Time to update my list!

  6. Jessica says:

    Great post. I’d also add our site AfterSteps (http://www.aftersteps.com) that provides this same digital estate planning service, in addition to securing your other critical legal, financial and funeral information, that will all be transferred to designated beneficiaries after passing.

  7. Brian says:

    Thank you for this piece. This is an issue that is becoming more and more imperative to address these days. Technology is advancing so fast that most states haven’t even started to tackle this issue in their laws. My wife and I recently had our estate plan put together in RI, and luckily, RI laws do grant personal representatives the power to access online accounts. As a Massachusetts estate planning attorney myself, I include language in my documents to provide this power to personal representatives and attorneys-in-fact.

    But you are absolutely correct in suggesting that people keep a list of accounts and passwords handy. Just as important — people should make sure to provide information about that list to trusted family members, etc.

    I wrote about this issue on my own site as well (http://malawyeronline.com/estate-planning/social-media-will).

  8. As depressing as it is to think about dying, this is extremely important. This can even include online bill systems, etc. Many people’s computers and phones are password protected. This isn’t something that is automatically considered when thinking about death but it should be.

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