My bank, USAA Savings Bank, has a section of its web site devoted to educating its customers. One of the recommendations is to have a “Digital Estate Plan.” What they suggest is a written document that explains how to access your various online assets in the event that you are not available.
It reminded me of a real life experience. One of my friends went into the hospital for knee replacement surgery. It is usually a routine surgery, so he didn’t make any special arrangements. Things didn’t go as planned and he died without having an opportunity to inform his wife of any of his passwords. I got the job of helping his widow gain access to the financial accounts. In addition to the grief she felt upon his death, she was angry at him for placing the financial assets outside of her reach. I share the story to hopefully help some others avoid that kind of grief.
The approach that I have taken is fairly simple. I record all of my passwords in LastPass. I have written my username and LastPass password in a document that is available to Linda and to our daughter.
Will your estate executor have access to your digital estate? Do you know what is involved in a digital estate plan? It’s more than signing your paper will.
Is it enough to leave your email password on a notepad beside your computer?
Sorry, no. You need to learn more digital dos and don’ts.
Digital assets are various online or electronic files with your personal information. They include financial resources and social networks. Digital assets can include personal data with high emotional value. You could also have digital business property with monetary value. Digital assets can be stored electronically, online, in the cloud or on physical devices.
Passwords Can Control Access
Access to your online information or electronic storage is vital. Who should have access to your passwords?
When you make a will, you can appoint a digital executor. You can authorize your executor to hire experts to handle digital assets. You must, however, share passwords and login information to manage such assets.
Executors face a dilemma; in some cases, you may not have ownership of some digital property. Instead, only a non-transferrable access license may exist. Social media user agreements may only permit network access with a personal password. There is nothing to own or sell.
But executors have a duty to collect estate assets. Will they have to hunt for your passwords and usernames?
What about your material in the cloud, on social media or video sites? You can create a digital estate plan and specify your preferences. How is your executor to handle your digital accounts? Should files be closed, maintained or memorialized?
Estate trustees must be aware of their duties to secure devices with digital information. This includes cell phones, tablets, laptops and computers.
Documents, photos, videos, text messages can be personal or business materials. Executors may not be able to distinguish between these.
Digital assets may have emotional and personal connections for your survivors. This may not translate to monetary value to calculate probate or income tax. However, the loss or expiry of a business domain name or blog can affect online sales and value.
Customer subscription lists and shopping carts can be stored online for businesses. Trademarks, copyrights and creative work can be considered assets and intellectual property. What about the value of an unpublished manuscript or musical composition?
Your online financial accounts may automatically pay utilities, credit card bills, income taxes or loan payments. Your digital estate property can include:
- domain names
- online photos and music
- memorial websites
- shopping networks
- loyalty and reward programs
Credit card agreements may impose deadlines for the transfer of rewards or membership points.
Do Not Store Passwords in Wills
You need to store your digital information somewhere other than your will.
Once probated, your will and any password information become public. This could lead to fraud, cybercrime and identity theft.
Many online services store passwords and access codes. These may promise confidentiality. Their guarantees may be short-lived when such businesses fail. Also, digital laws will likely change and courts can order disclosure of such records.
Executors must be aware that online fees can continue to be charged and go undetected. Credit card payments or debt service accounts may have been set up for automatic payments. Without paper statements, executors may be unable to track them.
Digital worlds often have no paper trail to follow. User agreements may prohibit the transfer of passwords and access to anyone other than the registered user.
Can your executor answer your secret questions?
When asked, “What is your favourite bar beverage?” my answer is, “who’s buying?”
It can be hard to stay on top of all of the changing media, electronic devices and social media websites. The majority of Americans have at least one kind of digital account like e-mail, Facebook or Twitter. But, what happens to these accounts when you die? It is important for people to know how to incorporate social media into an estate plan as part of their estate administration.
Digital media is here to stay. With almost everyone having at least an email account it can be important to consider what happens to these accounts when people die. If an account is left open it can be vulnerable to hackers, as in the case of Joan Rivers. Weeks after she died her Facebook had a posting endorsing a new IPhone. There are some steps for a person to consider when coming up with a digital estate plan.
First, people should make an inventory of all digital media accounts they have. These include all email addresses, Twitter, Facebook, blogs, online backup programs, photo sites, financial accounts, ITunes, Amazon, home utilities managed online and other electronic sites. After coming up with this list, keep it in a secure location. Something like a password management program can keep all this information in one place. After having the information secured, designate a family member or trusted friend as the digital estate executor. This person will be in charge of all of the digital account information and will have your instructions of what to do with it should you die. Finally, decide what you want to do with your digital information when you die. This should be included in a digital estate plan for your executor to carry out.
Everyone should have an estate plan to make sure their wishes are carried out after death. A digital estate plan is another thing to consider, along with the more traditional wills and trusts.
As we spend more of our lives online — banking, collecting credit card rewards points, playing virtual reality games, creating photo albums, emailing, tweeting — it’s increasingly important to consider how beneficiaries can access those accounts and any assets they hold, once we’re gone.
“It used to be when someone passed away, there were all these clues — a paper trail around the house about what the deceased person owned and owed,” says Karin C. Prangley, an estate attorney at Krasnow Saunders Kaplan & Beninati in Chicago. “Now there is no more paper trail. All of that is digital. It’s a big deal because it’s hard to get at that digital information.”
Ignorance can be costly. “If you can’t get into this person’s email account, if you have no idea where this person banks … the [deceased] person may have a million dollar account at Fidelity, but you just don’t know, says Prangley.
“Maybe the person had an insurance policy, maybe the person had an online store selling a specialized product, maybe there was some sort of business you as the heir don’t know about. The money goes right to the grave.”
Not having access to the deceased’s online accounts or email alerts could mean that bills normally paid online go unpaid. Since the estate is responsible for existing debt, missing those payments could cause headaches as you straighten out the problem, says Deborah L. Jacobs, author of “Estate Planning Smarts.” “If you don’t find credit card accounts quickly and bill paying is delayed and finance charges are assessed, you can most likely get the credit card companies to forgive the finance charges,” Jacobs says. “But you may have to fight them.”
The opposite situation is also a problem. Recurring bills that are on auto-pay may continue to be paid even after the product or service is no longer needed.
“We’ve seen instances where someone has been dead for years and they’re still paying for The Economist online,” says Jacobs.
Finding financial accounts
Without a list of financial accounts, finding them can be tricky, but there are steps you can take. The easiest: check the person’s wallet, pocket, desk and drawers for the receipts, Jacobs says. “Even if you’re doing almost everything online, those receipts may be in their pockets.”
To find open accounts, such as credit cards that aren’t regularly being used and generating receipts or bills, you can get a copy of the deceased person’s credit report from one or all of the three consumer credit reporting agencies, TransUnion, Experian and Equifax. But you’ll need documentation, agency representatives say.
For example, all three require a copy of the death certificate and proof that you have power of attorney or are executor of the estate.
In addition to banking and investment accounts, many people access their airline, hotel and other rewards programs online, says Glenn C. Williamson, CEO and founder of WebCease Inc. in Portland, Ore., which helps heirs track down those digital assets. “I personally have half a million Hyatt points, valued at $35,000 to $45,000,” Williamson says.
… Maybe there was some sort of business you as the heir don’t know about. The money goes right to the grave.
— Karin C. Prangley, Estate planning attorney
The potential dollar loss goes beyond financial accounts and rewards programs to items you may not think of immediately, Prangley says. “What’s the cost of losing a lifetime of photos? What happens to unique weapons held by a World of Warcraft master? What about wins in offshore, online poker accounts?”
North American respondents to a survey by security giant McAfee valued their digital assets at an average of $54,722 with listed assets including music downloads, photos, emails, financial and health records, career information and contacts, and hobbies and creative projects.
Even a great-grandfather may have digital assets if he’s been online, says Williamson. “We did one 91-year-old guy who didn’t even have an email address and he had hotel points,” he says. Another man in his 80s had a separate Facebook account for selling RVs — news to his family, Williamson says.
Finding assets online can be time-consuming. First, heirs have to know an account exists. Second, they have to be able to gain access to that account via usernames and passwords.
“People are grieving,” says Jacobs, the author. “This is adding an extra hardship.”
Williamson estimates it took him 25 hours to find his mother’s online accounts after she passed away, which gave him the idea for WebCease. WebCease routinely searches about 60 nonfinancial online accounts, including photography sites such as Flickr, hotel and airline rewards programs, social media sites and e-commerce sites including Amazon, PayPal, Netflix and eBay.
WebCease researchers will personalize the search and look for additional accounts when necessary, Williamson says. For instance, in the case of the RV enthusiast, they searched various campground websites to see if the deceased had a membership with valuable rewards or resale potential. “We wouldn’t typically search on those, but when my researchers make a correlation they will go further than our standard list.”
WebCease lets its clients know what it finds, and then gives them each site’s policies and information on how to transfer the digital assets and how to shut down the account, Williamson says.
Rescuing vital records
Passwords are the next hurdle. Even if you as the executor or heir have written permission from the deceased account holder to access accounts, without the proper passwords, online providers may not give you the content, says Hazel Sanchez, estate planning attorney at the Law Offices of Rhonda H. Brink in Austin, Texas.
Some online providers, if they were to find out the account holder is deceased, would simply close the account and delete all the information on it.
— Hazel Sanchez, Estate planning attorney
“Each one has different procedures,” says Sanchez. “Some online providers, if they were to find out the account holder is deceased, would simply close the account and delete all the information on it.”
Sanchez recommends that if you do have access to usernames and passwords, you print out hard copies of financial information so that even if the accounts are later deleted, you’ll have the information you need.
Technically in these cases, you could be liable for unlawful access of data, but it’s not likely an heir would be prosecuted. “They talk about liability of unauthorized access, but nobody ever enforces it,” Sanchez says. “It’s more important for the fiduciary to gain control of assets and prevent deletion of information before anything happens.”
Sanchez says a little pre-emptive action can prevent any problems related to unauthorized access. “We recommend will provisions that give the executor authority to access the deceased’s digital assets and accounts,” she says.
Shutting down fraud
Eventually, though, you’ll want to make sure you close accounts for security reasons. The identities of nearly 2.5 million people are misused every year to apply for credit, according to a 2012 study by ID Analytics.
“You don’t want mom’s profile out there,” says WebCease’s Williamson. “When you die, it’s public record. It’s so much easier to steal a deceased person’s identity.”
When you die, it’s public record. It’s so much easier to steal a deceased person’s identity.
— Glenn C. Williamson, CEO and founder of WebCease
To prevent fraud and identity theft, notify credit card companies and other lenders that the person has died, says Maxine Sweet, president of public education at Experian. “They will report the deceased status to the credit reporting companies and it will automatically become part of the file, preventing fraud,” she says. “If the deceased was receiving Social Security benefits, the Social Security Administration also should be notified and [SSA] will also report that information to us.”
Even if you’re not looking for open accounts, you still should contact the credit reporting agencies with a copy of the death certificate, so the credit file can be updated, says Clifton O’Neal, vice president of corporate communications at TransUnion.
You may also want to contact the Direct Marketing Association to have the deceased removed from marketing mailing lists, Sweet says. “Having those arrive in the mail can be painful for the relatives,” she says.
Planning your digital afterlife
You can prevent many of these hassles for your own heirs by making preparations now. A few simple measures can lessen or eliminate the need for your loved ones to become online sleuths after you’re gone.
Keep a snail mail trail
Even if you do business mostly online, elect to receive some paper statements so your heirs will find out about your accounts from mail delivery, says Jacobs, the author. “Even though I favor cutting down on the paper in our lives, this is not the place to do it,” she says.
Consolidate your accounts
Combining financial accounts or at least moving assets to a small number of providers makes them easier to keep track of, Jacobs says. “I know of a number of elderly people who have certificates of deposit at 50 different banks,” Jacobs says.
Finding the records could be sheer luck. Jacobs and her husband went to one bank her mother-in-law used to cash in one of her CDs and the bank officer told the couple she had a second CD that they hadn’t known about.
List account information
Make a list of accounts with the name of the financial institution, account number and how it’s titled and put it in a folder if you’re comfortable having that information at your house, Jacobs says.
If not, make one list of user IDs and a separate list of passwords, Sanchez suggests. Give each list to a different person and tell your executor those people’s names so the two lists can be put together when you pass away, she says.
She acknowledges that keeping the list up to date could be time-consuming, but says it’s necessary. “We think it’s very important for everybody to make a list inventory of what they have,” Sanchez says.
Name an online executor
As you make that list of user names and passwords, consider naming an online executor, who could be separate from your overall estate executor, says Prangley, the estate attorney. An online executor would identify and provide information to your family about your online accounts and digital assets and they could sell what might be useful to others, she says. Further, the online executor could delete any emails or other online communication that might hurt your family members, she says.
“Some people have separate online lives,” she says. “Your executor might delete your online flirting.”