Tips for Planning Your Estate for the Digital Age

Tips for Planning Your Estate for the Digital Age

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.

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.

“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.”

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.”

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.”

  •  Additional resources
    Am industry has cropped up to cater to today’s digital estate planning needs. For example, Eterniam, founded in 2013, preserves all your digital assets — photos, videos, documents and content from social media sites. You can bequeath each asset to chosen beneficiaries.

The Digital Beyond, created by John Romano and Evan Carroll, is a think tank for digital death and legacy issues. Its website, thedigitalbeyond.com, maintains a list of online services designed to help you plan for the future of your online content.

Can you claim frequent flier miles after death of a parent?How to prevent ID theft after deathWhat happens to credit card debt after death

Who will get your iTunes when you die?

A shift in legacies

The so called GenY has been growing in a different age than their parents. The digital realm has taken over some aspects in everyday life, and that’s something we will have to live with.

We previously  had photo albums, scrapbooks, handwritten journals and letters, pieces of ribbon and shoeboxes to rule them all. If you wanted to get back in time, you just had to open these shoeboxes, carefully hidden in the basement or stored in the closet behind a pile of blankets.

Today, we do have dvd of photos, social media accounts, Facebook statuses and emails ; even the diplomas you are getting from your online courses are PDFs, not pieces of paper framed and proudly displayed behind your desk.  Cyberspace is getting a hold on these precious memories. And that may be an issue in terms of memories and privacy.

Most of our online accounts are locked behind passwords, and without proper guidance, memories may arise once again when you would have liked them to disappear, or those precious memories, photos or videos that you had with a love one may be deleted from cyberspace. That’s why you should take action right now, read more on the howtos, and prepare a list of your legacy, with proper instructions and beneficiaries !

Digital Files After Death, What Happens to Your Digital Legacy?

how to manage the digital legacy of the departed

In April, Google added to its services an Inactive Account Manager, which lets you designate an heir who will control your Google data when you die. You choose a length of inactivity, and if your accounts are ever quiet for that long, Google will notify your heirs that they’ve inherited access to your Gmail correspondence, YouTube videos or Picasa photo albums — whatever you specify.

It’s about time that Internet giants get in front of the privacy issue and offer users options for dealing with a digital legacy. After all, we live in an age where an increasing number of people make and share materials that live only in the digital world — nearly 50 percent of adult Internet users, for example, post homemade photos or videos online. A number of services can help with digital estate planning by designating password recipients or deleting accounts or files when you die. But communication and privacy laws have yet to catch up with technology. WhileFacebook made it possible for family members to convert the page of a loved one into a memorial a few years ago, the company has faced multiple lawsuits from family members who wanted deeper access to their kids’ Facebook accounts after a sudden death.

Clearly it’s important for people to consider who will have access and control over their digital data when the time comes. But this focus on privacy and access ignores the emotional significance of a loved one’s digital legacy.

“Right now the contemporary discussion is privacy and utility,” says Will Odom of the Human-Computer Interaction Institute at Carnegie Mellon University in Pittsburgh. “It’s not about how digital materials will be represented in any meaningful way.”

Think about how we interact with material heirlooms, items that are often deeply symbolic and sentimental. Your great-grandfather’s watch, an old photo album or stack of letters might be kept in special box on a high shelf or tucked in a particular drawer. We safeguard these items not just to remember the individual, but so future generations will know and remember too. And when the living ache to connect to the dead, it’s often in a ritualized setting: Letters might be read in a favorite chair with a glass of wine and a box of tissues. Photo albums are pulled out during holidays. We keep our relationships with lost loved ones alive by keeping their things.

Digital possessions — be they e-mails, texts, photos or tweets — are fundamentally different than tangible goods, says Odom, who has been investigating bereavement in the digital age. This makes digital materials particularly challenging to deal with after death. For one thing, there’s a matter of scale. Your house or apartment can contain only so many objects. People continuously get rid of tangible things as they acquire new ones, keeping only what’s important. But digital objects are spaceless. You don’t have to purge even if your inbox is bloated with thousands of unread e-mails. So it’s easy to end up with orders of magnitude more digital things than tangible ones. Digital objects are also oddly removed from view. While you can discern with a glance that the stacks of ancient National Geographic magazines in your parent’s attic are indeed stacks of ancient National Geographic magazines, you can’t tell what’s on a laptop and whether you want to keep that content just by looking at the laptop. This makes it especially difficult to make decisions about digital heirlooms.

“People end up in a weird holding pattern of keeping a phone or a desktop computer,” Odom says. “They want to keep it, but they are too overwhelmed to go into it.”

Recent studies by Odom and colleagues suggest that there may be something fundamental and ancient about how we interact with items left behind by the dead. While there currently aren’t easy ways to curate digital heirlooms, people sure do try. Many of the people the researchers interviewed were enacting similar rituals with digital objects that people use with material ones. One woman had 25 or so cherished text messages from her dead husband. She kept the SIM card and old phone in an ornate box and would take them out and read them from time to time. A woman from England buried her husband with his cell phone and kept sending him texts after he died.

Odom and his colleagues conclude that bereavement in the digital age might be easier if we had devices that allowed us to interact with digital objects in the same ways humans have interacted with heirlooms through the ages. As one woman who didn’t like the idea of storing special digital photos on a CD remarked: “They deserve better than that.”

Based on comments like that one, the researchers have designed three devices that display a deceased person’s photos, tweets and other digital heirlooms on screens embedded in oak veneer boxes. In tests, families said that they would want to keep the devices alongside their cherished physical heirlooms. As one mother put it: “Seeing it age with them — the things we’ll always have — it feels right.”

Clear rules needed for managing digital afterlife

A topo of digital assets versus tangible assets

A regular definition of a digital asset can be “Anything that is stored digitally, in the cloud or on local media, that might have financial, personal or emotional value”.

Your digital and online assets can be classified in two categories. On the one hand, accounts, which are keys that lead to the digital vaults like iTunes, twitter, facebook, … . On the other hand, you do have digital goods like emails, photos, tweets, music, ebooks, movies, and so on. Apart from these, you can also have digital currency, in the form of money sitting on paypal, bitcoins, online games accounts.

 People start recognizing the value of their digital assets. Take Facebook. It appears that around 10% of Britons leave their facebook password in their will# — and amongst the reasons are the fact that our photo albums do not sit at home.. but in the cloud.

 Lastly, it’s not because it’s a in game that a digital asset will have no value. They are auction websites specialized in trading items or local currencies for online games. A sword in a game (was Age of Wulin) can be sold 16k$ — and World of Warcraft fans can sell their characters from 500 to 800$ for characters on which some time was spent, to 5000$ for some well equipped warriors.

 You can consider as well your eBook library, songs and electronic movie catalog (all of them being legal and paid for, I’m sure), as well as, let’s say, your apps, for which you’ll be spending around 10$ a month# in average. Whatever the support digital assets rely on, they still represent prized possessions, with a clear financial value, but also a nice sentimental and personal value.

 A washington estate attorney took the example of one client having a complete activity and business online. A photograph today can have pictures that are published or licensed, thousands of pictures stored digitally, instructional videos and tutorials, etc.

Now imagine her heirs going into her house after her departure: there may be no trace of her business, save for the camera and set-ups. But the products would not be there, maybe no negatives, or prints, even less film rolls. Contracts, licenses, all accounts could be stored as well in the cloud. Without a proper planning, her whole life work could be done: no more publishing or licensing.