Your estate plan covers all the essentials: a will, living will, trust documents, durable power of attorney and a health-care power of attorney.
Or does it?
In the digital world, a new wrinkle has emerged.
“You can have your estate perfectly planned, but your online accounts can make it a nightmare,” says attorney Robert Barnett, a partner at Carlile Patchen & Murphy.
Formally called digital assets, these online financial, social media, email, photo storage, entertainment and retailer accounts are the latest consideration in estate planning.
“Going paperless is the trend, so there’s more opportunity to miss online accounts,” says Shawn Ballinger, associate wealth manager at Budros, Ruhlin & Roe, a Columbus financial planning firm.
“We’re finding families really don’t know everything their loved ones have online. You can’t get the email notices and bills if you don’t even know about the online accounts. It’s a mess, and there’s no perfect solution,” Barnett says.
Beyond the specter of delinquent bills, there’s the problem of what to do with LinkedIn, Twitter, Facebook and other social media profiles. “Your digital image can outlive you. How do you want it managed if you become disabled or die, and who do you want to have online access?” says attorney Tommy Taneff.
The duty of a power of attorney (POA) holder, executor or trustee is to wind down a person’s affairs after his or her death. Providing personal online account information to your estate planning team and trusted family members lets them do that more easily. There are several ways to incorporate Internet information into an estate plan.
Often, traditional executor, trustee or POA documents aren’t adequate to gain access to another person’s online accounts.
“A POA isn’t specific enough to give the fiduciary access to digital accounts,” Taneff says. “Just because a document says someone has been given access to the accounts doesn’t mean it will be accepted by the online company when it’s presented.”
Nearly all organizations have strict privacy policies, and they vary from company to company. However, those multiple-page agreements, which few people bother to read, spell out everything users need to know. “It’s like any fine print. You don’t think you need to, but reading them is more important than ever,” Ballinger says.
“Those policies complicate access. The terms can delay or prevent the release of usernames and passwords without a fight,” Taneff says.
“When a person dies, some sites do allow an executor access, but many, many other sites are paranoid about security and their answer is a firm no,” Barnett says.
Dealing with companies whose computer servers are located outside of Ohio—or in another country—adds another layer of legalities. “When you click ‘yes’ to any online policy, you’re bound by the state law where the company is situated. It doesn’t make any difference what we do in Ohio at that point,” says attorney Mark Watson, a partner at Stubbins, Watson & Bryan in Zanesville.
“You can get a court order from the probate judge, but it’s not worth much if your data is physically stored in India,” says attorney Bill Browning, a partner at Browning, Meyer & Ball.
The bottom line? “There is no right for survivors to your online information. And just because you appoint an administrator, executor or guardian if you become disabled or die, they don’t automatically get access,” Taneff says.
Financial accounts are typically the first order of business for an estate’s executor.
“With a death certificate, the trustee or executor usually can get statements from financial institutions, brokers and insurance companies. If online accounts are associated with them, you can operate with paper just as easily,” Browning says. “Once the account closes, the online presence takes care of itself.”
Tax preparation sites are another consideration. “Could your spouse access your previous tax returns if something happened to you? Or work on this year’s taxes?” asks Ballinger.
Digital access problems most frequently surround social media, email, entertainment and retail accounts. “Those are the accounts that don’t necessarily close without a specific action,” Ballinger says.
Is the deceased the keeper of the online family photo album? “A lot of families store their photos online today, but you need a password to get to them. Who else has it? There’s usually not any monetary value there, it’s the sentimental value,” Browning says.
Sentimentality also applies to email messages exchanged between survivors and the deceased. Be aware, though, that the discovery of secret email accounts can open a can of worms. “Families could learn things that change everything,” Ballinger says.
The most common solution to the problem posed by digital assets is to create an additional estate planning document that includes all of a person’s online account names and passwords.
Browning’s firm started using an online inventory last year. “We maybe get 25 percent response. People just aren’t thinking about it yet. It’s an issue, though, that only will become more of an issue. Baby boomers use the Internet, but younger generations are more technologically dependent,” he says.
Give someone you trust access to your online information. “If you don’t want to share it right now, put it somewhere safe with your other important papers and lock it up for later,” Taneff advises.
Some people file website names, account IDs and passwords on their password-protected computer and give the password and the file location to a trusted person. “But even then, some sites ask you to regularly update your password for security purposes. Will the one that’s written down still be accurate when it’s needed?” Barnett says.
“The big question is, who do I tell? What if they lose the information? And how do I feel about sending my passwords into a cloud if I use some service?” Barnett says, referring to companies that back up and secure online data.
There also are more old-fashioned solutions. “Copy files to a hard drive or device. Print photos or send them electronically to family members who value them,” Browning says.
Also, it’s wise to close unused online accounts, especially if there is credit card information stored there.
Ballinger chairs the Financial Planning Association of Central Ohio. He says the organization hasn’t specifically addressed digital assets, but the topic is popping up more frequently in trade journals and at professional conferences.
Watson attributes the confusion to a lack of federal law. “There’s a hodgepodge of state laws, but none are hitting on all cylinders,” he says. Watson chairs the Transferring Digital Assets Committee, which is part of the Estate Planning, Trust and Probate Law Section of the Ohio State Bar Association (OSBA).
Issues such as digital assets that, arguably, are best addressed nationally are taken up by the Uniform Law Commission of the National Conference of Commissioners on Uniform State Laws. Its Fiduciary Access Committee currently is reviewing the matter.
“The Uniform Trust Code, Uniform Guardianship Code, Uniform Power of Attorney Code and Uniform Probate Code all can be impacted by the digital assets issue, depending on the level of planning or lack of planning on the part of the client,” Watson says. “If the Uniform Commissioners can come up with a legislative structure that crosses state lines, it will allow access to digital accounts with the appropriate court order.”
In the meantime, the OSBA is taking a wait-and-see approach. “States often tweak the work of the Uniform Commissioners, so eventually we want to go to the Statehouse to explain the issue and how it affects consumers. Lawmakers can then begin the legislative process to address it in Ohio,” Watson says.
Lisa Hooker is a freelance writer.