(As seen on WZZM TV 13) We have numerous online accounts — photo and document storage accounts, online banking and brokerage accounts, music, movie, eBooks and other entertainment accounts, social media accounts, virtual stores where we sell products — the list goes on and on.
So in a world where much of our life is located online, what happens to those accounts and assets when we die or if we become incapacitated?
Attorney Daniel Borst, an estate planner at Warner Norcross, said current laws have not kept pace with the online world, and in many cases it is unclear how online accounts and assets should be handled upon death or disablement.
“There is a lot of gray area in this field,” Borst said. “The Stored Communications Act gives some guidance to online companies as to what information they can give to third parties, and it also gives guidance as to who can access your online accounts.”
However, Borst notes that the Stored Communications Act, which was enacted in 1986, more often poses a hurdle to estate planners and their clients rather than providing a framework for passing on assets and account information.
More recently, a handful of states have tried to address the issue of whether a fiduciary or a third party acting with someone’s consent can access online accounts.
The need for balancing someone’s privacy rights with account access also needs to be considered in any future laws.
“I think we just need clear rules so we can know how to advise clients,” Borst said. “Right now, the rules are not clear.”
Still, Borst and other estate planners are doing their best to help clients plan for the future of their online assets and accounts. Borst said one of the first things clients need to do is to take a full inventory of their online accounts.
“They might not realize how much value they have in online assets, whether its pictures, a book they were working on, eBay stores or PayPal accounts,” he said.
Clients should also make a list of what bills they pay online.
The next step is to write down all those usernames and passwords. Borst acknowledges that many people are nervous about taking that step due to the threat of identity fraud, but not having access to those passwords poses another hurdle.
He noted some people prefer to use an online password encryption site to store their username and password information, but he warns that many of those sites have come and gone and there is no way to know if a given site will be around in 10 or 20 years.
Finally, Borst includes specific language in estate-planning documents regarding digital assets.
“A basic estate plan includes a durable power of attorney, so if you become disabled, you name an agent who would be able to do your banking, pay your bills, and even buy and sell real estate,” he said. “We are adding language to those documents saying ‘they can also access all of my online accounts.’”
One more thing people need to think about, Borst said, is that, in signing some of those online user agreements, they are agreeing that the assets are nontransferable upon death. If they want to be able to pass on a digital music collection, extensive movie collection, a library of eBooks, etc., they might not be able to do so because they do not actually own those items but, rather, have paid for their use through licensing agreements.