Don’t Forget Your Digital Estate Plan

Make sure directives for online accounts are in place before you die

The Dinkins

Terrell Dinkins will make sure her family can access her important digital information

You might have key estate planning documents such as a will, trust, power of attorney, and healthcare proxy, but you might be forgetting something: your digital property. Lack of directions regarding how your online accounts can be accessed after your death could pose a problem when it’s time to handle your estate. In an age where almost everything is either online or on a computer, things such as banking and tax accounts could make life difficult for your executors.

“In this digital era, not having access to a deceased person’s online accounts could prove costly,” says estate planning attorney Karin Prangley. Prangley knows from personal experience. In 2009, her father-in-law, a small business owner, suffered a stroke. He relied largely on e-mail to communicate with customers and suppliers; he also received company bills online. Unfortunately, no one had log-in information for his e-mail account. Making matters worse, the e-mail service provider wouldn’t help because of customer agreement restrictions.

“We were unable to communicate with his customers and suppliers,” says Prangley. “We didn’t know what bills to pay and what supplies to deliver where. It was a very difficult time made harder by not having access to the account.”

On the contrary, Terrell Dinkins stores her life insurance policy, banking account information, and passport, as well as her will, healthcare directives, and power of attorney for her and her husband, Jeffrey, 44, in what she calls an electronic vault. The financial adviser for Peachtree Planning Corp. in Atlanta uses a tool called Living Balance Sheet to consolidate information online. She made sure her husband, also her executor and beneficiary, has the appropriate passwords and knows how to access her information in the event of her demise.

“I like knowing that if something should happen to me, [my husband] doesn’t have to scramble. He can go to one place and find everything.” The vault also includes photos of their children, Jordan Elise, 8, and 11-year-old Jeffrey Jr.

“In general, technology adds an extra step to the traditional estate planning process,” says James D. Lamm, an estate planning attorney in Minneapolis. “The extra step for digital property, if we can find it, is gaining access, because it may be protected by passwords or encryption. Also, some Internet-based companies might not let you access the decedent’s digital property,” he says.

Take an inventory.
Take stock of all online accounts (as well as important documents that are stored digitally). Don’t forget to account for often overlooked digital assets that may hold significant financial value. Lamm cites examples of valuable digital property, such as virtual real estate, items from virtual worlds in online games, or domain names.

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