Let's face it: Your e-mail account, Facebook page and online photo albums are likely to outlive you. Deciding how to manage your digital legacy just may be your trickiest estate-planning task.
See Also: Special Report on Estate Planning
As people increasingly live—and die—online, family members and estate executors are left to sift through e-mail messages, Facebook status updates, blog posts, tweets and other digital remains that may have significant financial or personal value. And even if they have all the required passwords, many heirs will find they have no clear authority to access or manage the online accounts of the deceased. A confusing and sometimes contradictory snarl of online user agreements and state and federal laws can restrict Internet users' ability to transfer their online accounts to loved ones after their death and prevent families from retrieving information stored in the digital realm.
Despite the devilish details, it's essential to include online accounts in the estate-planning process. Failure to plan ahead may prevent loved ones from recovering family photos or videos or settling your final bills. It also could leave your estate vulnerable to post-mortem identity theft, if fraudsters decide to apply for credit cards in your name while nobody's watching your accounts.
What's more, a library of digital music or an Internet domain name that you own may have financial value that's significant to your estate. The domain name HotelsGuide.com, for example, recently sold for $60,000, according to domain-name marketplace Sedo. "We shouldn't dismiss our digital assets as insignificant or unimportant," says Evan Carroll, co-author of Your Digital Afterlife (New Riders, $25). "The things that may seem ephemeral to us are very valuable to heirs once we're gone."
The value of these assets can go far beyond the financial worth in the wake of a loved one's death. After her brother died in 2011, Melinda Miller quickly had his Facebook account "memorialized," meaning friends can still post messages on his page, but no one can log in to the account. "That first six months, I didn't know if my parents were going to recover" from the loss, says Miller, 41, an elementary school principal in Springfield, Mo. But as friends have continued to post photos, songs and holiday greetings on her brother's page, "it's very comforting to the family to see the messages continue," she says. "It's like a memory wall."
The first step for seniors starting to navigate this new world of digital estate planning is to recognize the obstacles they face. Each online service provider has its own terms of service—the legal mumbo-jumbo you click through when you open your account—and those terms often say that you can't transfer your account or hand off your password to anyone else. Those restrictions pose a challenge for heirs who might want to access your e-mail account, for example, to retrieve bills and other documents.
Providers differ on how they handle the accounts of deceased users, but some are starting to help users plan their digital afterlife. The Yahoo terms of service, for example, say that "any rights to your Yahoo! ID or contents within your account terminate upon your death," and accounts may be deleted if a death certificate is submitted. Google in April introduced a new feature allowing users to specify that after a certain period of inactivity their account data should be deleted or passed along to specific individuals. At Facebook, relatives may be able to request the contents of the account—a lengthy process involving a court order—or ask that the page be deleted.
Federal laws present another hurdle. If you use your late mother's password to log on to her account, you may violate not only the provider's terms of service but also the federal Computer Fraud and Abuse Act, which governs certain unauthorized access to computers. And a federal privacy law, the Stored Communications Act, can limit providers' ability to share deceased users' account contents with relatives.