Will drawn up? Check. Trusts created for the kids? Check. Executor of the estate named, health directives signed, and funeral arrangements specified? Check, check, and check.
With all that done, you may think your work is finished. But there’s one key facet of 21st century estate planning that many people overlook: a digital estate plan.
This plan lays out your digital assets — both financial (such as online bank and brokerage accounts purchasing and download destinations like Amazon, Apple, Netflix, and Expedia) and social (like Facebook and Flickr accounts) — and provides directions on how to access and handle them upon your death.
To help make the process simpler, Google just launched an Inactive Account Manager feature, which lets you tell the company what you want done with your digital assets on its services (Gmail, Blogger, Google Drive, Google+, Picasa, Google Voice and YouTube) when you die.
The Importance of a Digital Estate Plan
Maybe you never thought of your Facebook account, your eBay shop, or your virtual land on FarmVille as an “asset.” In fact, 63 percent of people don’t know what will happen to their digital assets when they die, according to a survey by Rocket Lawyer, an online legal service.
But think about all the information and docs and apps (such as what may be stored in the cloud) in these accounts and the potential value they represent. If you're a photographer, for example, much of your valuable work may be digital and stored in password-protected areas of your computer or in the cloud.
“In this day and age, your digital assets should be a part of your estate planning,” says Rick Salmeron, founder of Salmeron Financial in Dallas. “You need to pass on the keys to your digital kingdom.”
A 5-Step Digital Estate Plan
Here are five steps to help you create a digital estate plan:
Step 1: Make inventory lists of your digital assets and how to access them. One should have your online passwords and the other should have your online account numbers. If all that information is in one place and someone steals that list, he or she can easily hack into all of your digital accounts.
The lists might be long; you may not be able to put them all together in one sitting. (You should also have a record of your non-digital assets, as a blog post by Next Avenue Money & Security editor Richard Eisenberg explains.)
Your digital inventory could include the following:
- Your Facebook, Twitter, LinkedIn, and other social media accounts.
- Blogs and websites you own.
- Bank, brokerage, retirement plan, credit card, loan, and insurance accounts that you access online.
- Your email accounts.
- Online retail accounts and apps from stores, flash sale sites or marketplaces like eBay, Amazon, and iTunes.
- Photo- or video-sharing sites like Flickr or YouTube.
- Music sites like Pandora.
- PayPal or other online payment accounts.
- Utility bills you pay online.
- Any other online accounts such as ones from airline sites with your frequent flier miles and document and data storage accounts like Google Docs
If you use a “digital wallet” product on your cell phone — like a prepaid Starbucks app that lets you pay for your lattes from your phone — this too might be worth adding to the list.
Try to update these inventories at least once a year — or, ideally, whenever you change a password, or close or open a digital account.
Step 2: Find a safe place to store this information. Since your digital inventories contain personal information that could lead to identity theft and financial losses if it gets into the wrong hands, “you have to be very careful" about where you put them, says Susan Slater-Jansen, a trusts and estates attorney at Kurzman Eisenberg Corbin & Lever in White Plains, N.Y.
One option is to store the lists in a safety deposit box at your bank. Or you might put them in a site like Legacy Locker or SecureSafe, which securely encrypts and stores all of your account information and passwords in one place. You can also use one of these sites to store copies of important documents such as your wills and trusts, the deed to your house, stock certificates and birth certificates. When you die, your beneficiaries get access to everything you’ve stored.
Legacy Locker costs either $29.99 a year or $299.99 a one-time fee plan. SecureSafe plans range from free to $12.90 a month, depending on how much information you want to store.
You can also give the lists, or a copy of them, to a trusted person like your spouse, child or best friend, as well as your digital executor (see below).
Step 3: Name a “digital executor.” This is the person you designate to carry out your digital estate plan upon your death, ensuring that your end-of-life requests are met.
Your digital executor should be impartial and mature, able to handle this sensitive information responsibly, and technologically savvy, says Charley Moore, founder and executive chairman of Rocket Lawyer.
Once you’ve settled on someone who fits that description, name him or her as your digital executor in your will, says Moore. Be sure your digital executor knows how to access your digital estate plan, including instructions that spell out how to handle your online accounts upon your death. You should also give your digital executor power of attorney over your digital accounts, since he or she may need it to access the accounts after you die.
Let your digital executor know if you have automated any of your digital assets by using something like Google's Inactive Account Manager.
Here's how that feature works: Google will automatically send you a text or an email alert if you've been inactive for a certain amount of time (you pick the duration when signing up in the Account Management area of one of your Google accounts). If you don't respond, Google will notify your friends or family members whose contact information you've provided. Once they've confirmed that you're deceased, Google will do what you've instructed and either share your accounts with these people or delete them.
Although Google is ahead of the curve on this, Salmeron says that "there is no doubt in my mind that companies will be following its lead."
Even though Google Inactive Account Manager process is automated, it's important to let your executor know that you've set it up, so he or she isn't trying to figure out what to do with these accounts.
Step 4: Write out instructions for what should happen to your digital assets after you die. Your will most likely lays out the distribution of all your bank and brokerage accounts, so you probably don’t need a separate written plan for the ones you access online, says Michael Sears, vice president and trust officer of Great Plains Trust Company in Overland Park, Kansas.
Just make sure the executor of your will knows how to obtain your list of online financial accounts, since this can make divvying up your estate faster and easier, he adds.
Your non-financial digital assets, however, are a different story.
Sears says it’s a good idea to create a to-do list outlining how you want all things digital — from your Facebook and LinkedIn profiles to your Flickr and YouTube accounts — to be handled when you die. Then give this document to your digital executor.
The to-do list should answer questions like these:
- Do you want your Facebook account deactivated when you die, or do you want it to remain online as a memorial of your life?
- Do you want prints of your Flickr photos sent to your family members?
Before you create this list, you should review the terms of services on your digital social media accounts, says John O’Grady, a trusts and estates lawyer at the O’Grady Law Firm in San Francisco. The terms of service for social media sites can take precedent over state laws.
Typically, you will need to give your digital executor or someone else the user name and password for your social media accounts, so they can log in after you die. Otherwise, your wishes may not be honored.
In general, Facebook won’t grant access to an account to anyone other than the account holder (or your digital executor, if you’ve given him or her permission to enter your user name and password).
Instead, the company can do one of two things when a Facebook user dies. It can “memorialize” the user's profile so friends and family can still see it and post on the wall, but can’t log into the account or find the deceased in a search. Or it can deactivate the profile at the request of the user's family.
Twitter lists only the option of deactivating the account on its “Help Center” site. And it doesn’t make this process easy: You need to fax Twitter copies of the death certificate and your government-issued ID (such as a driver’s license), along with a signed, notarized statement and either a link to an online obituary or a copy of the obituary from a local paper.
To access your YouTube account after you die, the person you appoint will need to send YouTube a copy of your death certificate and a copy of a document saying he or she has power of attorney over the account.
As for Gmail, Google says that it will only grant a family member access to a deceased person’s email “in rare cases.” The family member requesting this access must send Google a copy of his or her government-issued ID and the death certificate. But even then, the company doesn't promise that it will let anyone into a loved one’s email account.
Step 5: Consider whether you want to post a final message online. Your digital estate plan can also explain how you want to send a final online message (or messages) to friends and family.
Do you want to record a video of your life story and have it posted on your YouTube channel when you die? Do you want to create a photo album chronicling your life and have someone put it up for you on Flickr?
Whatever you decide to do, be sure your digital estate plan provides specific instructions for your digital executor about any content you want to be posted online upon your death, as well as how and when it should be posted.
Catey Hill is a freelance personal finance writer, who has written for Next Avenue, The Wall Street Journal, SmartMoney, Worth, MarketWatch.com, Forbes.com and others.