Estate Administration In A Paperless World

more+
less-

While our current digital, paperless world has made life more efficient for most, when someone dies, it can be difficult for the survivors to obtain the keys to unlock all of the digital information that is left behind. As a result, it is important to plan during life to make the process of administering one’s estate easier to navigate.

Estate administration is the process in which executors and/or personal representatives (the “Executor”) appointed under a Decedent’s Will are charged with the responsibility of handling the Decedent’s estate. What this means is that the Executor must probate the Decedent’s Will, gather, or marshal, all of the Decedent’s assets, inventory them, file any necessary estate and/or income tax returns that are due and then distribute the assets pursuant to the terms of the Decedent’s Will. Typically, Executors hire professionals (attorneys and accountants) to assist them in completing these necessary tasks.

Often times, the Executor may not have first-hand knowledge of the composition of the Decedent’s estate. In such case, the Executor must rely on a review of the Decedent’s important records and files to compile an accurate inventory of the Decedent’s assets. Typically, this involves a review of all bank statements, brokerage accounts, tax returns, deeds, property records, insurance policies, etc. to compile a comprehensive and accurate list of the Decedent’s assets and liabilities.

Prior to our present internet world, this review by the Executor typically involved reviewing safety deposit boxes, file cabinets, and regular mail to review all financial statements that were delivered each month. This is no longer the norm for most taxpayers as many if not all accounts are online and paperless. Without actual knowledge of online accounts, Executors have no way of knowing what accounts are owned by a Decedent. For those Executors who do have knowledge, they face obstacles in the form of confidential user IDs and passwords to obtain the appropriate information.

These issues are not limited to the financial assets of a Decedent. Social networking sites, email accounts, photos, and online music and video libraries all have sentimental value which are part of the Decedent’s estate and are meant to be passed on. Without knowledge of passwords, this could become very troublesome to access.

We are in the relative infancy of our online world, and as such, few states have passed laws regarding the disposition and access to such assets. But rules governing online accounts are not limited to the passage of laws. Popular websites have developed policies on these issues, which you should be familiar with if you use them.

For example, for those people who have a Gmail email account, Gmail is one of the only websites that has an established and published procedure for accessing a Decedent’s electronic property. However, it is a long and arduous task. The website refers to it as a “lengthy process.” The website’s privacy policy sets out a two step process that “may” in “rare cases” allow an Executor to obtain access to his or her emails.

For Hotmail users, although, Microsoft does not have a written policy regarding this scenario, the company does have an internal policy in dealing with this matter. In the event a user passes away, Microsoft will allow the next of kin to either close the account or request the contents of the account. If the latter request is granted, Microsoft will ship a DVD to the next of kin that contains all emails and their attachments, address books, and Messenger contact lists.

Facebook does not allow access to a person’s account without the username and password. However, in the event that a user passes away, Facebook gives the family two options. The family can either formally request that the profile be closed or request that the profile be “memorialized.” If a Facebook profile is memorialized, only the deceased user’s family and confirmed friends can view pictures and write on the wall in remembrance. Alternatively, the account can be deactivated and the page erased.

Similar to Facebook, LinkedIn allows for a deceased member’s profile to be memorialized. When a profile is memorialized, LinkeIn may restrict profile access, remove messaging functionality, and close the account if they receive a formal request from the user’s next of kin or other proper legal request. Alternatively, once death is verified, the profile will be removed.

Upon the death of a user, Twitter will de-activate the account and/or send out an archive of all the user’s public tweets. In order to request one of these courses of action, either a person authorized to act on behalf of the estate or a verified immediate family member of the deceased must contact Twitter.

Interestingly, in its privacy policy, Yahoo! explicitly prohibits any right of survivorship or transferability of content. The policy states, “[y]ou agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.”

Apple has no policy in place regarding this scenario. Thus, for a Decedent’s ITunes Account, you would need to know the Decedent’s username and password.

Clearly, many problems and delays related to online accounts are preempted if the Executor knows the Decedent’s usernames and passwords for his or her accounts or the place where this information is stored. The question for people during life is where to store this information while keeping it protected. Safes, safety deposit boxes, and/or providing this confidential information to trusted family members, friends or professionals all are options to consider in this regard.

There are also online companies that provide this service as well. The New York Times recently published an article discussing a few of these services. Of course, these services are only useful to your heirs if you update them anytime your user names or passwords change.

What is important to know is that when you are planning your estate, you need more than a properly drafted Will. You need to have a comprehensive asset and liability list, and if they are online and paperless, a secure place to store your usernames and passwords so they are accessible. Furthermore, you should compile a list of all of your other online accounts (email, social networking, professional, etc.) and their user names and passwords as well so that your Executor is able to easily access them in the event you are unable to disclose this information prior to your passing.