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Does My Estate Plan Need an ‘ePlan’?

Does My Estate Plan Need an ‘ePlan’
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The average American maintains between 30 and 50 online accounts at any given time. These may be with banks, financial institutions, utility companies, email providers, social media outlets, commercial shopping or travel sites and accounts unique to technology, such as an account to purchase apps for a smartphone.

Modern estate plans should include what’s known as an “ePlan” to manage online accounts and online data. There are four steps to creating an effective ePlan, says American Legion’s recent article, “Estate planning and online accounts.”

  1. Create a List of Accounts and How to Access Them. Your list should specify the username, password, account number, and a description of what’s included in each account. Make sure to keep this list up to date.
  2. Store and Protect Your Info. Develop a plan for storing information, including saving your compiled list and backing up essential data files and account information. Since an ePlan account list contains sensitive information, such as usernames and passwords, it’s crucial to maintain the security and confidentiality of this list.
  3. Designate a Digital Executor. The laws of many states give access to online accounts to the executor of an estate. However, in some cases, state law may restrict access if the executor doesn’t have the password or an estate plan does not grant powers to the executor to access these accounts.
  4. Give Your Executor “Digital Directions.” Draft a letter of instruction to the digital executor and tell them how to manage your online accounts and digital assets. It may also include suggestions on the distribution of accounts, assets, files, and information to the family.

Note that Google, Facebook, Twitter, Apple, and other companies have policies for when an account holder dies. These policies may permit an account holder to designate a “Legacy Contact” to manage the account; require specific documentation before a deceased person’s account can be closed, such as a copy of a death certificate; or automatically close an account after an extended period of inactivity, such as three months.

Digital estate planning is a new and dynamic field. By adding an ePlan to your estate plan, you can be confident your executor will take the proper steps to preserve and protect these accounts, and that valuable and sentimental data can be passed on to family and loved ones.

Reference: American Legion (Dec. 13, 2022) “Estate planning and online accounts.”