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Estate planning grows more complex every day. Not simply because of changes in tax laws, but also due to trends in modern technology. For example, consider what would happen to all of your online accounts – both financial and social media – if you were to pass away. Do your heirs know your usernames and passwords for access to email, investment and bank accounts?
The laws in the United States haven’t caught up with the Internet age either, considering that there is little directive regarding heirs’ rights to online accounts after death. This can lead to complications for survivors who need to access a deceased’s account. In addition, many social media sites have privacy contracts that supersede state laws.
In order to take a deceased’s name off a joint bank account, some banks require you to close the account and open a new one. However, consider the consequences if the deceased person was responsible for paying the household bills. If he or she set up automatic recurring payments from the account, closing that account might mean that those bills will not get paid. And since many people use online billing, the grieving spouse might not even realize what has happened until the electricity gets cut off, as no bill would’ve come in the mail.
Digital Planning
A digital estate plan is a separate process from your financial estate plan. This plan should detail your account and access information for online bank and brokerage accounts as well as purchase accounts such as Amazon, Apple, Netflix and Expedia. Then there are your social media accounts, such as Facebook, Flickr and Twitter.
The best way to tackle this plan is to create an inventory list of your digital assets and how to access them. One option is to store the list in a safety deposit box at your bank. If you’re not storing it in a similar safe location, you might want to create two lists – one for usernames and the other for passwords, and store them separately. Otherwise, anyone who finds a comprehensive list would have access to all of your accounts.
Try to update these inventories at least once a year or whenever you change login information, open or close an account.
Consider naming a digital executor who is different from your estate executor, since this person needs to be technologically savvy. You might want to give your digital executor the usernames and passwords for your social media accounts so they can log in and deactivate your accounts on your behalf after your death. Otherwise, the steps for an unauthorized user to deactivate your accounts can be complex and time-consuming.
Digital Providers
With Twitter and YouTube, currently your only option is to have the account deactivated after your death. This process is onerous, as it requires that your heirs send proof of your identification and death certificate to have your account deactivated. Facebook gives your family two choices of what to do with your webpage: deactivate it or memorialize it so that friends and family can continue to post messages and photos on your wall. In general, Facebook won’t grant access to an account to anyone other than the account holder.
In April, Google announced a new feature that will allow its users to set a plan in motion regarding their digital belongings after they die or become incapacitated. An Inactive Account Manager can be used to direct Google to pass on data from online venues such as Google Drive, Gmail, YouTube or Google+ to particular people or be deleted after being dormant for too long.
Google automatically sends you a text or an email alert if you’ve been inactive for the amount of time you specify. 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 follow your instructions to either delete these accounts or share them with those people.
If you’re active online with either financial or social media accounts, consider the merits of digital estate planning to make things easier on your heirs when you pass away.
