You could store the information with one of the online services, in a safe-deposit box, or put it on a CD or flash drive and give to a trusted adviser. But don’t put your login information in your will — wills that go to probate become public record.
2. What do you want to happen?
Next, detail how you want to dispose of each asset. Get specific.
For example, “If I’m dead, memorialize my Facebook, delete my Twitter and LinkedIn, and here’s how to get the cash out of my PayPal,” suggested Jean Gordon Carter, an estate-plan attorney and partner at Hunton & Williams LLP in Raleigh, NC.
Keep in mind that your wishes may run afoul of the service provider’s policies, depending on the terms of service associated with each account — terms which, by the way, can change at any time. The best you can do is leave a detailed digital estate plan, and hope for the best.
In some cases, account deletion may be the default option. For example, Yahoo’s current terms of service for email accounts says: “You agree that your Yahoo account is nontransferable and any rights to your Yahoo ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.”
If that’s precisely what you’d like to have happen — maybe your emails are not for your family’s eyes — then don’t provide your password for that account in your estate plan, and note that you’d like that account deleted without being read.
3. Consider any estate-management tools offered by the company
Email service providers and others have started to change their policies in response to the complexities of dealing with digital assets after an account owner’s death. Some email providers, for example, may provide an estate’s executor with a copy of the decedent’s emails (it’s unlikely that they’ll provide the username and password).
For its part, Facebook will delete an account or allow the user’s timeline to be memorialized once it receives proof of death and proof of the relationship between the decedent and the person making the request. Read more here.
“If your mom has no idea what Facebook is, you don’t want her going in and trying to handle it.”
In April, Google announced its Inactive Account Manager, which will contact your chosen representative if your account goes inactive for a specified period. If you have any type of Google account — Gmail, Picasa, Blogger, etc. — then consider opting into this service .
“Although it is cumbersome to have to deal with each provider separately, where they do offer the mechanism, it’s the easiest way to deal with what you want to have happen after your death,” Klein said.
4. Designate a digital executor
Pick a trusted friend or relative to handle your digital assets after you die. This person could be your main executor, or someone else.
“If your mom has no idea what Facebook is, you don’t want her going in and trying to handle it. In some cases, it might make sense to name a different fiduciary for that role,” Gerson said. “You can name two executors and say one has ‘limited power to handle my digital assets.’”
Get specific: Name the person, and name each account for which you name them as an authorized user.
Your will can state that you give your executor the authority “to manipulate, maintain, delete — whatever you like — my digital assets,’” Carter said.
Naming such a person is no guarantee. “Whether that works perfectly if there is a terms of service agreement that conflicts with that, that’s unclear, but it’s certainly better to be proactive and nominate someone,” Klein said. “Then that person has the ability to say, ‘This person authorized me to have access.’ That will certainly facilitate things after death.”
For specific tips on dealing with iTunes, e-books, email and bitcoins, read How to give away your digital fortune.
Do you have a vast iTunes library? Maybe some e-books stashed on a Kindle or Nook? Do you sell items on eBay or use PayPal? Bitcoins? Got an online-only bank account? Email and Facebook?
Americans value their digital assets at more than $54,000 on average, according to a 2011 survey conducted for McAfee, a security technology company — but few people take the time create an estate plan for their digital assets.
Without a plan in place, you risk burying your family in red tape as they try to get access to and deal with your online accounts that may have sentimental, practical or monetary value.
If you have, say, a Yahoo email account, your emails might be deleted before your family has a chance to review them. In other cases, maybe your family gains access to emails that you’d rather they didn’t see.
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Or, maybe you’ve been blogging for years, and your family wants to maintain your online writing as a sort of memorial. Without access to the accounts through which you manage that blog, it might be deleted before your family can act, or spammers might take over the comments section.
These are the sorts of problems that a digital estate plan — one that details your online assets — can help prevent. Keep in mind that, given the legal complexities, a digital estate plan won’t guarantee your wishes are met. But it will help your executor as he or she attempts to manage and distribute your assets.
And it’s not only an issue of family photos and other sentimental assets. If you have an online-only bank account or a PayPal account, your executor may never know about that account if not for your digital estate plan. And what if you have a fortune in Bitcoins on your computer?
But divvying up your online assets is complicated: These accounts often are governed by the terms-of-service agreement to which you agreed upon opening the account. Often, service providers have created those agreements to comply with federal laws that limit access to account information to authorized users.
Plus, most state laws don’t offer specific support to executors in taking control of digital assets. Even where such laws exist, they are often well behind the reality of today’s technology. (The Uniform Law Commission, a nonprofit that drafts model legislation for states to adopt, is in the process of drafting a proposed law on digital assets — a Uniform Fiduciary Access to Digital Assets Act — but there is no guarantee states will adopt the legislation.)
Given the legal realities, creating a digital estate plan won’t fully guarantee your wishes are met after you die.
“It makes for a pretty convoluted state of affairs. I don’t know that there is a perfect comprehensive solution,” said Sharon Klein, managing director of family office services and wealth strategies at Wilmington Trust, in New York.
There are services such as Family Archival Solutions, PasswordBox (which includes Legacy Locker) and SecureSafe, among others, that aim to offer easy online solutions to the digital-asset conundrum — from full-service estate plans for your online accounts to simple password-management solutions.
But such services come with their own set of challenges. Will the company still be around when you die? Will its encryption methods fall prey to scammers? In the end, you’ll have to decide whether an online solution, an encrypted file on your home computer or simple pen-and-paper work best for you.
1. Make an inventory
First, make a list of your online accounts so your executor knows about your online assets.
Just as you would with your physical assets, “make an inventory of the accounts you have,” said Alexandra Gerson, a lawyer with Helsell Fetterman in Seattle. Read more about estate planning: It’s not about the money.
Keep in mind that allowing just anyone to log into your account could be a violation of the terms of service. But an executor acting in the best interests of the estate and as per the terms of your will is unlikely to run into problems.
(Read more below on designating a “digital executor.”)
The estate’s executor or representative “has a duty to inventory your estate, locate and ascertain creditors and ultimately pay creditors and distribute assets to your beneficiaries,” Gerson said. “Your digital accounts are part of your estate.”
Your inventory should include login IDs and passwords. “It’s no good just knowing about the accounts if you can’t get access,” Klein said. “Be vigilant about keeping that updated and storing it in a safe, private, secure location.”