If you were to die tomorrow, do you know what would happen to your online accounts? Like many other areas of the law the answer is, it depends. It depends on whether your survivors have user names, passwords or legal authority under a trust or from a probate court. Your online accounts generally do not expire with you and can continue long after you are gone. How do your survivors close down or terminate those accounts?
The first thing to do is to keep a list of all of your user names and passwords. Some people put their user names and passwords in a password protected online file. Many experts discourage this type of risk, since even password protected online files can be hacked. If you want to keep it in an electronic file format, keep that file in private locations such as your own computer, on a flash drive or burn to a CD or DVD. Or you could go to the old fashioned way, like I do and that is just pen and paper.
The next important thing after keeping the list is to have the list secure but accessible to your successors. I keep my list in a spot that is easily accessible to my successors. If something happens to me, they can access my online accounts.
Who are your online successors? You may have already chosen your successor trustee of your trust and/or your personal representative/executor of your estate. It may be that the person you have chosen to handle your financial affairs may not have the computer skills to handle these online accounts. You may want to designate a separate computer savvy person to handle those.
You may also end up being responsible for the online accounts of your parents or other relatives. When you sent your daughter Suzy to help mom or dad set up a Hotmail, Comcast or other internet account, were the user names and passwords written down? It might be wise to start keeping track of these accounts now when mom or dad is alive and well, then trying to reconstruct them after a mental incapacity or death.
I am aware of some accounts that do not allow anyone without a user name or password to access the account, not even a legal representative. Have you ever read that privacy/licensing agreement of these online accounts? You know the ones I am talking about. The ones that you always check the box that says, “I have read the agreement and agree to all its terms.”
I have to admit that there are some of those agreements that I have not read in their entirety and I doubt that very few people have. However, there may be some provisions in those agreements that can make it difficult for your successors to access those accounts. For example, if you have not left your username and passwords, how are your successors going to download all the pictures that you have uploaded to your Facebook page or access the cash that you have left in your PayPal account or complete all the open auctions you have left on eBay?
There may be even certain accounts that the agreement states that upon your death you forfeit all rights to the account and it reverts to the account issuer? I have read that certain Yahoo accounts are treated this way.
Your successors may be legally bound to notify the account issuers of your death. In such cases, those accounts may be frozen and inaccessible by anyone. Your successors may even have to get a court order to have access to these accounts, if at all.
The first step in preparing the list is just keeping track of all of your online accounts. Most people do not realize the nature and extent of their online accounts. There generally are three types of online accounts: financial, work related and social. Some accounts may be a combination of types.
Some of the online accounts in the financial realm are pretty obvious such as your online banking or stock broker accounts. What about your other investment account such as stocks, bonds, annuities, life insurance, 529 college savings plan, dividend reinvestment accounts and the like? Make sure that they are also listed. But also remember your IRAs, 401(k), 403(b), 457 and other retirement plans. Did you spread them out across a number of financial institutions?
Think about your credit cards. Some credit cards allow you to do everything online. What about other bill paying accounts that you may have set up for car loans, mortgages or your utilities? Other financial accounts include shopping accounts which would be either as buyer or seller, such as eBay, PayPal, Amazon.com or even just individual retailers. Often times your personal information, including credit card data, is stored on those sites.
Other information may be stored online that you may not think about, such as rental properties. With my rental properties, I have an arrangement with the utility companies that automatically switches the utilities into my name when a tenant moves out so I can avoid any service interruptions, account transfer fees, shutoff or turn-on fees or freezing pipes in the wintertime. Some of these are handled only online.
Next you have work related type of accounts. You may be a member of some professional associations. Each of those associations typically has their own account set up. In my own situation, I have accounts with the State Bar of Michigan, Michigan Association of CPAs, Michigan Institute for Continuing Legal Education, American Institute of CPAs, American Association of Attorney-CPAs, National Network of Estate Planning Attorneys, Michigan Forum of Estate Planners, etc.
Also in your work or professional life, you may be involved in service organizations such as Rotary for which members each have their own separate account. You may also have a Google Docs account in which you share business documents. If you are paying employees in your business, you are probably handling your withholding and payroll tax deposits through an online account with a password.
Do you have internet business accounts or websites? Does your domain name need protecting or do you want the business to continue after you are gone? What about your business software? Most all business software nowadays is handled through online accounts with downloads. Make sure that all of those software applications and vendors with user names and passwords are also listed so that your successors can continue your business and renew any subscriptions to any software licenses when they expire.
The last type of online account is social media. One of the first things to list is your email accounts and passwords. I know a number of people that have two, three or more email accounts to be used for different things, one for shopping, one for banking, one for work, one for friends, one for school, etc. There are also online storage sites for things like photographs and other documents. These online storage services are only worthwhile if they can be accessed.
What about your Facebook account? You may also be on other social networking sites such as LinkedIn or Twitter. What about blogging sites in which you have been active? Some social networking sites have no provision for terminating your account so your page could be memorialized forever. This may be of comfort to some family members or it may just creep them out. I have known some people saying their final goodbyes on their deceased loved ones’ Facebook page.
If you are on any of these social networking sites or blogs, you can prepare your own final message ahead of time. You then can leave instructions to your successors to send out the email blast and tweet and to post to your Facebook page and blog that you have joined the choir invisible. This would be your last goodbye.
By keeping lists of these online accounts with usernames and passwords together with specific directions to specific individuals on what to do with these accounts, you can make life much easier for your successors.
By: Matthew M. Wallace, CPA, JD
Published edited April 8, 2012 in The Times Herald newspaper, Port Huron, Michigan as: Online life continues long after death