Technology

Planning Your Digital Afterlife

Figure out what will happen with your digital assets such as emails, social networks and online financial accounts after you die.

"There are three kinds of death in this world. There's heart death, there's brain death, and there's being off the network." — Guy Almes, Director of the Academy for Advanced Telecommunications and Learning Technologies, Texas A&M University.

Almost all of us have a digital life and digital assets, including files stored on your devices such as desktops, laptops, tablets, storage devices and smartphones. The term "digital assets" also includes emails, digital music, digital photographs, digital videos, software licenses, social network accounts, file sharing accounts and financial accounts.

What happens to this digital data if you die or become incapacitated?

First, someone has to locate your digital assets. Unlike photo albums or books on your shelves, digital assets can be hard to find. Someone needs to check your computer, smart phone and any hard drives or USB drives you may own. Next, that someone should look for your content on social networks such as Facebook, Instagram and LinkedIn or information stored in cloud services including Google Drive or iCloud. There are also your financial accounts for which paper statements are no longer received and personal credit data stored on online shopping sites such as Amazon or Zappos.

Once your digital data is located, the next hurdle is to gain access to your data. Someone will need log-in credentials and passwords. However, even once they are in, they will still need to figure out what can be legally done with the data. While you may have purchased a movie, a book, or music online and downloaded the movie or music to your device, in most cases, you do not actually own the music, books or movies that you have downloaded. Most likely, you have purchased a license to listen, watch or read the book for the rest of your life, but when you die the license expires.

Most email companies' terms of service agreements prohibit anyone from accessing an account that is not their own. Currently, Google lets you assign an "inactive account manager," who can access your account in the event of your death, and Facebook lets you decide whether your account should be memorialized or be deleted after you die.

However, in August, California passed the California Revised Uniform Fiduciary Access to Digital Assets Act, which established guidelines for how and when companies can share an individual's emails, instant messages and other digital records following death. The new law, approved by the Governor on September 24th, allows an individual to "use an online tool to direct the custodian to disclose or not disclose some or all of the user's digital assets to a designated recipient." A user may also provide instructions in his or her will. If the online tool contradicts the individual's will, then the instructions in the online tool must be followed. The new law also states that an individual's written instructions will override the custodian's (such as a Google or Facebook) terms of service.

What should you do to help ensure the transition of your digital assets when you die or become incapacitated?

Become more aware of the digital assets that you have, and keep an updated inventory of it all, including where the data is stored.

Consider naming a digital fiduciary in your estate planning documents (your will, trust, durable power of attorney). This person will provide the necessary information to service providers and gain access to download or delete digital information. The person you have chosen to be the legal representative of your will and trust may not have the skill sets to deal with your digital assets. Your digital executor should be able to understand and manage the technical aspects of archiving or managing digital data. If you make such directions in online tools, make sure the directions are consistent with what has been provided for in your will.

Also, making certain that your digital fiduciary will have access to your computer and your passwords is critical. I am reminded of an estate administration I handled years ago—the widow could not unlock her husband's computer where all of their financial information was stored. The mental anguish and financial toll on the widow was huge. Passwords have become an essential part of each of our lives. You may no longer receive monthly paper statements of financial accounts or billing statements, and the only way to access the data may be through a password. Without your passwords, your successor trustee may not be able to pay your bills or monitor your credit card accounts. If you use online shopping accounts with stored credit card information for future reference, delays in closing these accounts after you pass away can result in fraudulent purchases. Passwords are essential in gaining access to these accounts to make changes.

Each of us has our own method of keeping track of passwords. Do you keep a password protected word document stored in the cloud or backed up to a USB drive? Or are your passwords stored with an electronic password manager that allows you to enter all of your passwords in a single database and locked with a master password? Both of these methods can work, as long as you keep the information up to date and let someone know where your passwords are kept. More recently, a new business model of digital gatekeepers has arisen. For a fee, a digital gatekeeper will store data that you enter and release it upon death in accordance with your instructions.

Leaving a legacy that works best for your loved ones means keeping up with changing times. Further, the components of your current estate plan may not fully complement the many facets of your digital life, and you may wish to discuss with your estate-planning attorney whether any updates to your current estate plan are needed.

Judy Gordon is an Estate Planning Advisor with B|O|S, an independent, fee-only financial planning and investment advisory firm.

Disclaimer: The material provided is for informational purposes only and is not intended to be a source of any specific recommendation. The responsibility for assessing its relevance to any reader rests with that reader. Opinions expressed are as of the date noted and are subject to change.

About the Author

Judy Gordon, JD, Tax LLM

Estate Planning Advisor, BOS

In 2016, Judy Gordon joined B|O|S in San Francisco as Estate Planning Advisor after a 35-year legal career in sophisticated estate and gift tax planning, charitable planning and probate and trust administration. She provides consulting advice for private clients and advisors on wealth transfer strategies, tax planning opportunities, and trust and estate administration. She lives in Palo Alto.

Gordon received her B.A. in Psychology at the University of Florida, her J.D. at Georgetown University and her Tax L.L.M. at the New York University.

Most Popular

3 Dated Rules of Thumb Retirees Should Think Twice About
investing

3 Dated Rules of Thumb Retirees Should Think Twice About

The tried-and-true investing and saving rules of thumb retirees depend on may no longer be as reliable as they hoped. Don’t let dated “rules” steer yo…
August 11, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Are You Rich?
personal finance

Are You Rich?

You might be surprised. It depends on how you measure it, and the bar is changing.
August 12, 2022

Recommended

Create a Special Needs Plan That Goes the Distance
estate planning

Create a Special Needs Plan That Goes the Distance

Getting the services needed for a person with a disability can take some careful planning, considering some important benefits programs limit the asse…
August 9, 2022
Pot Trusts: Why They’re the Fairest (Trust Structure) of Them All
estate planning

Pot Trusts: Why They’re the Fairest (Trust Structure) of Them All

When it comes to estate planning, being fair and being equal are not necessarily the same thing. A pot trust can help bridge the gap between the two o…
August 8, 2022
Should You Treat Your Kids Equally in Your Will? 12 Financial Planners Weigh In
retirement

Should You Treat Your Kids Equally in Your Will? 12 Financial Planners Weigh In

What's the "fair" way to divide an estate? Many parents think they should divvy things evenly among their children ... but that can backfire. So what'…
August 1, 2022
18 States With Scary Death Taxes
inheritance

18 States With Scary Death Taxes

Federal estate taxes are no longer a problem for all but the extremely wealthy, but several states have their own estate taxes and inheritance taxes t…
July 29, 2022