The digital evolution now has reached estate and financial planning. One of the most important aspects of estate planning has long been to tell your loved ones where to find copies of your will, power of attorney and financial contacts.
That's still true. What's changed is where people store their important information and documents, and that's increasingly online.
Unfortunately, most people don't consider what would happen if they died and no one knew how to access the information.
"We often plan for physical assets, but many do not have a plan in place for digital assets," said Rick Salmeron, certified financial planner at the Salmeron Financial Network in Dallas.
"Digitalization has changed the way we run our lives," he said. "As a result, it has changed the face of estate planning. Death in the digital world has made dying a lot more complicated."
If people die without leaving directions on how to access their online life, "that life may become inaccessible," Salmeron said.
"Heirs simply may not know of the existence of each and every online bank and investment account," he said.
Allen, Texas, residents Blaine and Shelia Thomas have embraced "digital estate planning," and share one master password that gives them access to their bank and credit card accounts and important documents.
"One of the biggest troubles my wife and I had was we manage joint accounts, and frequently passing user names and passwords in email and storing the stuff in a spreadsheet is a risk," Thomas said.
He said his method gives him peace of mind.
"In the past, a lot of people had a very small fireproof safe that they put in their closet, and wills and passports and whatever would go in there," he said. "But documents can be stolen. I feel they're important enough that having a record of them in a digital format and having them in this location provides me this ease of mind."
Now Thomas wants to go a step further.
"I want to take this content and write up a simple procedure, put that procedure on a USB stick, password-protect it and give it to a family member," he said. "And if anything bad were to happen, when you open that thumb drive, there are some files on there and it will be organized. File No. 1 says, "Go do this" and when you're done with that, File No. 2, says, "Go do this."
If you're like the Thomases and have stored much of your personal information and documents online, make things easy for your loved ones. Here's how to start:
>List your cyber assets. "Most individuals do not have a central repository of passwords and log-in information for the various and sundry sites they use and where they keep assets on the Internet," said attorney Peter Vogel, who teaches a course on electronic commerce law at the Dedman School of Law at Southern Methodist University.
So create a record of your cyber assets, including:
*Domain names, websites and blogs.
*Photos, videos and documents stored on sharing sites such as Flickr, YouTube and Google Docs.
*Online bank, credit card and investment accounts, and other such accounts that typically require a password.
*Accounts with online companies such as Facebook, Twitter and eBay.
*Documents, spreadsheets, photos and other such items that are stored on your computers, hard drives, DVDs, smartphones, flash drives and other offline or online servers or backup servers.
>Know where you stand. "Make sure the named administrator of your estate has sufficient power of attorney to gain access to these digital assets," Salmeron said.
It's also critical that you read and understand the terms of service of an online provider or service. That's because "many websites will not allow someone to access the content if the individual is no longer alive," Vogel said.
For example, Google said it provides access to a deceased person's Gmail account "in rare cases" and then only to an authorized representative.
"Any decision to provide the contents of a deceased user's email will be made only after a careful review," the company says in its terms of service.
At Facebook, the company "memorializes" an account after its user dies, meaning only confirmed friends can see the user's profile.
"In order to protect the privacy of the deceased user, we cannot provide log-in information for the account to anyone," Facebook said. "However, once an account has been memorialized, it is completely secure and cannot be accessed or altered by anyone."
Facebook will process "certain special requests for verified immediate family members and executors, including requests to remove a loved one's account."
>Make wishes known. "It's the same old-fashioned advice I would give to any client about any asset," said Ellen Dorn, estate planning attorney at Fanning Harper Martinson Brandt & Kutchin P.C. in Dallas. "And that is it's important most of all to communicate to those in your life whom you trust, or to your attorney, what it is that you own, what it is that you value and how that information can be accessed upon your death."
Added Salmeron: "If the person you have appointed as executor of your will is not digitally savvy, you might consider appointing a special digital executor who would act on your behalf after you are gone to distribute or delete your digital assets according to your wishes."
Name those you would like to receive each asset. "You can even include specific bequest language in the body of the will, much like estate planners routinely do for important items of personal property," Salmeron said.
The bottom line is your digital legacy is too important to leave to chance, so think about how you want to pass that on to your loved ones and make the necessary preparations.
Digital estate planning tips
Ensuring that your family can access your online information is part of digital estate planning. Make sure your family can find and access:
*Online bank, credit card and investment accounts
*Important documents, such as your will
*Websites and blogs you use