Devise a Plan for Your Digital Assets

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When you created your estate plan, the fate of your e-mail, Facebook and other online accounts probably wasn’t your top concern. But if you haven’t made plans for your digital assets after your death, now is the time to take action.

In the past few years, more than three dozen states have passed a uniform law that greatly increases individuals’ ability to control what happens to their digital assets after they die—and the legislation has been introduced in most of the remaining states. So now, there’s no excuse for letting your precious online photos and witty blog posts pass into oblivion.

Your digital property likely has more value than you think. In addition to the sentimental value of family photos or videos stored online, there may be significant financial value in any domain names you own, PayPal and eBay accounts, or a novel you wrote on your home computer. But “if you don’t plan ahead and leave your password, it’s gone forever,” says James Lamm, an estate-planning lawyer in Minneapolis.

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The new state laws create clear rules that govern whether your executor can access your digital property. Previously, online service providers “could choose to turn over a person’s digital assets after death or not,” Lamm says. Visit uniformlaws.org for a map of states that have enacted or introduced laws governing digital property after your death.

To determine whether an executor will have access to a digital asset after the user’s death, the new uniform law takes a three-tiered approach. Any instructions you leave in a service provider’s online tool take precedence over instructions in your will or elsewhere. Using Google’s “inactive account manager,” for example, you can choose to have Google send a link to a trusted contact, allowing that person to download your account data if your account becomes inactive for a certain period of time. So if the inactive account manager says your executor should have access to everything in your Gmail account, but your will says nobody should have access, your executor will get the e-mails.

If you don’t leave any instructions in online tools, then your will governs who gets access to your digital property. And if you leave no instructions at all, the service provider’s terms of service will be in control. In some cases, that means it may be difficult or impossible for an executor to access your digital assets.

Leave a Detailed Roadmap

To ensure your wishes are followed, you can leave instructions in tools provided by online custodians as well as in your will, “and make sure the instructions agree,” says Evan Carroll, co-author of Your Digital Afterlife (New Riders, $35). Alternatively, Carroll says, avoid the online tools altogether, and make sure your will spells out your wishes.

Take particular care when leaving instructions for digital assets that include private communications, such as e-mail. Under the uniform law, if you don’t specifically grant access to such digital property in an online tool or your estate-planning documents, your executor can only get a log of the communications—in other words, the date and sender or recipient of your e-mails but not the actual messages.

Create a roadmap of your digital property for your executor and other heirs who will be accessing your accounts. Don’t include user names or passwords in your will, which is a public document. Instead, your will could direct heirs to a separate document listing your digital assets and user names. Leave a list of the corresponding passwords “somewhere separate that’s more secure—a safe deposit box or an encrypted file on your computer,” suggests Karin Prangley, a wealth planner at Brown Brothers Harriman, in Chicago.

Most people are creating and changing passwords all the time—so you may want to consider a password manager such as LastPass or Dashlane. These free services store your passwords, fill them in automatically when you’re logging in to an account and help you generate more-secure passwords.

Laise covers retirement issues ranging from income investing and pension plans to long-term care and estate planning. She joined Kiplinger in 2011 from the Wall Street Journal, where as a staff reporter she covered mutual funds, retirement plans and other personal finance topics. Laise was previously a senior writer at SmartMoney magazine. She started her journalism career at Bloomberg Personal Finance magazine and holds a BA in English from Columbia University.