When it comes to estate planning, most people know the basic documents they should have in place, such as a will, power of attorney, and healthcare directive. 

We give careful consideration to the big picture items, but what about digital assets?

With our ever-expanding digital footprint, plans should also be made for your Gmail, Netflix, iTunes and Facebook accounts, and those beloved airline miles. Will your surviving spouse or executor know which websites to visit if they need to pay your utilities or make a mortgage payment? Will they have the credentials and authorization to access them? Are they aware of the other accounts you use which may also need to be closed?

Digital assets are a largely neglected part of the estate planning process, with a far from comprehensive collection of laws governing their management after a user has passed on. Terms of service agreements (which few actually read) generally dictate what happens to an account after an account holder dies, but without specific authorizations in place or login credentials, surviving spouses or other family members will likely run into significant red tape when they try to manage or close them. Google has implemented an “inactivity account manager” so a user can specify what happens to their account after a period of inactivity, and many other firms are implementing contingencies as well, but it is up to the user to take advantage of these options and provide directives.

Here are some recommended steps to take to ensure your digital assets can be managed or closed after you have passed on:

Virtual Asset Identification Letter (VAIL)

Create a VAIL and share it with your spouse or other trusted family member, ideally as a hard copy secured in a safe and in a digital storage account. This letter is an inventory of all your online accounts, and should include login information, answers to security questions and PINs. Your VAIL should not be included in your will, as a will becomes public record once you have passed and your will goes into probate.

Digital assets to be included in your VAIL:

Banking and securities accounts
E-Trade, Fidelity, or any other trading platforms that you use
Credit cards

Email accounts
Gmail, Yahoo, and any other accounts that you use

Computing/social media/digital accounts
Desktop, laptop, smart phone, tablet
Facebook, Twitter, Instagram, LinkedIn
Online picture libraries such as Shutterfly or Snapfish
iTunes, Spotify

Loyalty programs
Airline miles
Retail store rewards

Household accounts
Utility companies such as phone, cable, power, garbage
Debt accounts such as mortgage, automobile, and student loans
Insurance providers for home, auto, life, and health

This list is not exhaustive, if you think of more relevant accounts, be sure to include those as well.

Include executor access language in your power of attorney

Language must be added to your power of attorney documents to specify your executor’s ability to access electronic communications and digital assets. If available, include your state’s statute for the Uniform Fiduciary Access to Digital Assets legislation. Currently, 39 states have adopted the act.

Provide guidance and direction for protection or disposal of digital assets

Do you really want your executor to read all of your emails? Do you want your heirs to have access to online picture libraries? Document your wishes for transferring or terminating your digital accounts to ensure they are handled the way you want them to be.

Consider an online vault

Companies such as Everplans and Dropbox allow clients to upload documents and store them securely. Many financial firms utilize software programs that have a vault included – ask your financial advisor if that’s an option.

Utilize a password manager

Programs like LastPass can store usernames and passwords for all of the websites you use. You create one master password to access all of them.

It may take a few hours to organize all your accounts and to document your login and security information, but it will take you a lot less time than it will for your surviving spouse to try and navigate through each of your accounts’ customer service departments, at a time that’s already extremely challenging. And keep in mind, if a surviving family member is unauthorized or unable to access an account, they may not be able to close it or to retrieve or protect the assets stored there. The time you spend now planning for the management of your digital assets will provide you with peace of mind, and will make things much simpler for your surviving spouse or other trusted family members.

Ali Swart, CFP®

Director - Wealth Planning

Hall of