Email, Facebook, Twitter, and online banking have become as normal as breathing to most people. But what happens to these things when a person dies? The days of sorting through the deceased piles and piles of documents has ended. Many people today are totally reliant on their digital lives, from preparing and filing tax returns, using banking software to balance a checkbook, to getting all of their bills delivered online or via email. With things like encryption and passwords, how does someone access all of a person’s digital data after they die? Wealth Strategies Journal reports:
Increasingly, our lives are conducted online. For many of us, the lion’s share of our correspondence takes place by email. Our bank, brokerage, credit card, and utilities statements are delivered by email. Recurring expenses are paid automatically from our accounts without any action on our parts; other bills are paid with a few clicks and keystrokes. We rarely write checks. Our photos are collected in virtual albums on our smartphones and on photo sharing websites, rather than in the plastic sleeves of tangible albums on our bookshelves. Our address books are maintained on our smartphones. We file our taxes electronically; we may not even keep hard copies of our returns.
The more tech-savvy among us may even have e-commerce businesses, own the rights to valuable domain names, and write potentially lucrative blogs.
Whether an individual’s online activities have independent financial value or are merely the means of accessing hard assets of financial value, this phenomenon has far-reaching implications for estate planning and administration.
When someone dies, an administrative process starts into motion. Information must be gathered: Was there a will? Were there any outstanding debts? What kind of assets did the decedent own, where are they, and what are they worth? Are there ongoing costs associated with maintaining the assets? Where can the beneficiaries be reached? Will there be any tax due?
The traditional approach for handling an estate administration involved sorting through paper files in the decedent’s home and office and waiting for the postman to bring the mail. The bank and brokerage statements would arrive in due course, and we would know what the assets are. The bills would arrive in due course, and we would know what the debts and carrying costs are. Eventually, the missing pieces were filled in and the picture became clear.
In today’s world, this traditional approach is simply no longer adequate.