Do You Have A Digital Estate Plan?

Digital Estate PlanI’m sure you are comfortable that your estate plan is up to date. But have you reviewed your digital estate plan? What is a digital estate plan? It’s a plan for the disposition of all your  internet accounts once you are deceased.

Experts have estimated that the average adult with access to the internet has more than 25 internet accounts! In the past, we kept albums full of snapshots, vinyl records and shoeboxes full of correspondence. Now our photos are all on Flickr and IPhoto, our music is downloaded from ITunes and our correspondence is email via Yahoo or Google.

And probably more important than that, a lot of your bank and investment accounts may be entirely online.!

And what happens if you die? Who has access to these internet accounts? And if they want those accounts taken off the internet how do they do it? You may discover that it is more difficult than you think for family members to access your accounts or erase them from the internet.

The family of Ricky Rash, a 15 year old who committed suicide in 2011, discovered how difficult it was to recover information from their deceased son’s internet account. In an effort to understand why he had taken his own life, they requested but were refused access to his Facebook account. Facebook claimed that according to the Stored Communications Act of 1986 – the federal law that governs the protection of a person’s electronic data – even the account of a minor is protected from access by his parents or anyone else. Other sites and providers interpret the legislation this way, making access all but impossible.

Up until recently there were only five states that have taken any steps to help recover the internet data of a deceased person—Indiana, Idaho and Oklahoma legislation covers social media and blogging accounts, while Connecticut and Rhode Island legislation covers only email.

Delaware has become the first and only state in the US to enact a law that ensures families’ rights to access the digital assets of loved ones during incapacitation or after death.

What does this mean for you? It is critical that you create a digital estate plan. The listing of internet accounts needs to be more comprehensive than I originally recommended. Information must include:

  • the name of the account
  • the contents of the account
  • the URL address
  • username
  • password
  • instructions for the disposition of the account including the person to oversee such disposition.

I have created a new spreadsheet to gather this information. Email me at rmauterstock@gmail.com and I will send it to you.

There is a whole new industry that has been created to service your  digital estate including passwordbox.com, a new digital estate planning service. Your clients can create an account and then enter their user names, passwords and wishes for each of their digital assets. They can specify an heir for each account; Passwordbox will provide heirs with information after the account holder’s death is verified.

There are also online memorial services to celebrate your life, including www.Bcelebrated.com, and www.MyWonderfulLife.com. These services enable your clients to create their own memorials before they pass away. Facebook and Twitter also offer these services for family members.

The importance of having a digital estate plan will increase as more and more of our assets (and access to assets) are online. Gradually laws will evolve to give family members access to deceased loved ones’ accounts. It is important to prepare yourself for the disposition of their digital assets now so that family members will not be unpleasantly surprised when they attempt to uncover them.

If you want to explore digital estate planning in more detail read Evan Carroll’s excellent book Your Digital Afterlife or read “Death in the Digital Era: A Useful Guide” available from the http://www.digitaldustblog.com

©2013 Robert Mauterstock

Have You Discussed Your Estate Plan With Your Children?

siblingsAs a financial advisor to families for over 30 years, one of the most difficult conversations I had with clients was convincing them to discuss their estate plans with their children. They would often tell me. “The kids will work it out after we are gone” This was a recipe for disaster, setting the children up for messy battles that could tear a family apart.

One of my clients worked for his father in his waste management company starting when he was in high school. His older and younger brother also worked with him to support his dad’s business. When Dad passed away, he stipulated in his will that the oldest brother would inherit the business expecting my client and his younger brother to go to work for him.

Unfortunately it didn’t work out that way. My client felt like he had been cheated out of his future. He never spoke to his older brother again and started his own waste management business which became very successful.

It certainly seems easier to let our executors share with our family our intentions after we are gone. But it is a grave mistake. It is our responsibility to share with our children what our intentions and desires are before we die.

This is especially true if we own vacation real estate. One of my clients has a beautiful cottage on a lake in New Hampshire. His children and grandchildren have been going there since they were born. I asked him what his plans were for the cottage after he was gone. He replied, “ I don’t know. I will let the kids decide that”

I asked him what he thought would happen if two of his three children wanted to keep the cottage but the third couldn’t afford to support it. How would they decide what to do with his share? I informed him that this type of situation would do nothing but create friction within the family that could have horrendous ramifications. He needed to meet with his children and develop a strategy that they all could live with.

Fortunately he agreed with me and had a family meeting that was very successful, making it very clear to the family how the cottage would be handled and avoiding any future conflict.