Online Accounts After You've Gone

You receive electronic statements, set up auto payments and pay bills online. Companies like it because paperless billing is less expensive, more convenient and environmentally friendly. But what happens when you die or become incapacitated? How will your successor trustee or family members manage your bills or finances when the time comes? How will they know about bills due or money owed?

Your estate plan needs to be designed to make the administration process as easy as possible for your loved ones. This includes making it convenient to manage your assets, saving the hassle of sorting through your paperwork to pay your bills.

Without specific provisions in your estate plan and careful planning, access to this critical information can be difficult. Federal law regulating access to digital property doesn't exist yet, though many states have established legislation to protect digital assets and to provide a deceased person's family with procedures and rights to manage those accounts and assets after death.

Let's look at just one: The Uniform Fiduciary Access to Digital Assets Act from California, which establishes a process for allowing your executor, trustee, power of attorney or court-appointed conservator to access your online accounts after you die. This act also allows you to designate some or portions of your account as off-limits after your death. Many other states have passed similar laws.

Your durable power of attorney and your trust instruments can include provisions for naming a fiduciary to act on your behalf for these online accounts, assets and profiles. In today's digital world, many of our financial transactions and communications occur online and access can be very difficult without account names and passwords. If no one has access to the passwords, then what will happen? A lot of headaches.

Planning now can save a lot of problems later.

  1. Inventory your accounts—Document an inventory of accounts, including login IDs and passwords. Obviously, the information should be maintained in a secure location.
  2. Create an online vault—Set a place to keep passwords, identification or login information and other sensitive data.
  3. Establish a detailed digital asset plan—Write a clear, specific statement of intent about who can gain access to what information on accounts.
  4. Carefully select your trustee, executor or representative—Make your decision, considering the private and confidential nature of the information that you're making accessible.

Always keep in mind the specific state rules and regulations that could affect your situation.

Indeed, depending on what state you're in, there could be some confusion about how to handle online accounts after death. Even court rulings aren't always clear. So be sure to leave instructions for your executor on where to find and access information. Back up the media on external hard drives and store in a safe place. By engaging in some simple estate planning, you can protect your privacy, as well as ease the management of your estate after your death. Planning can preserve your legacy in its digital form.


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