So much of our lives are spent online -- banking, shopping, social networking -- that a new category of personal property has emerged, known to estate planners as "digital assets."
Digital assets include any work or possessions stored on a computer and the Internet. They include photos, videos, emails and playlists. People also store medical records and tax documents. As more financial institutions encourage account owners to sign up for paperless statements, the list -- and potential value -- continues to grow.
Each of these assets might even require different usernames and passwords.
Raymond Parker, an attorney at the Williams Coulson law firm, Downtown, said for about the past five years he has asked his clients to do an inventory of their physical and digital assets when they are writing a last will and testament.
"Because digital accounts and assets are a significant part of the financial footprint of many clients, they would have an incomplete estate plan if those assets and accounts were not considered as part of the planning process," Mr. Parker said.
While every adult should create a will to protect and provide for loved ones, a survey last month by San Francisco-based legal services firm Rocket Lawyer found a majority of Americans (61 percent) have not gotten around to it.
"It is difficult to decide who gets what, and people tend to postpone the act of creating a will," said Anna Pfaehler, a financial adviser at Palisades Hudson Financial Group in Scarsdale, N.Y.
"We have even had clients who created a will, but never signed it because they were still unsure of its contents. ... It's hard to think about your own mortality," she said. "I think that's another reason people will push it off."
When someone dies without a will -- also known as dying intestate -- the state decides how the property accumulated over a lifetime is distributed. But digital assets such as email, Twitter and Facebook accounts are so new that most courts have not developed rules for how to distribute them when there are no instructions in the will.
Even when there are clear instructions regarding digital assets, there are other legal hurdles to consider. Many social media websites have contracts that protect the privacy of users.
"Just because you have a username and password with the user's consent, you could still be violating laws by accessing another person's account," Mr. Parker said. "There is a movement now to enact legislation making it permissible for another person to access online accounts with the consent of the account owners."
The Pennsylvania Legislature recently considered House Bill No. 5580 that would permit a personal representative to deal with email, social networking sites, microblogging and text messaging services.
But the bill was referred to the Judiciary Committee last summer and appears to have died there.
Privacy laws are so strict concerning online activity that nearly all social networking websites have policies in place for dealing with the death of account owners. Popular sites and services like Facebook, Gmail, LinkedIn and Twitter have deceased-user policies to provide the family or executor with information needed to access accounts.
Many people have extensive arrangements to pay regular bills online or they may have assets online tied to PayPal, e-Bay or Amazon.com. People running their own business are likely to store important information on computers. A domain name or a blog also could be valuable, yet it may only be possible to access it via password or email.
Some members of airline frequent-flier program might even accumulate a staggering amount of points or miles and die without having spent them. As long as a beneficiary knows the online login information of the deceased member, it may be possible for the remaining benefits to be transferred or redeemed.
A recent McAfee study showed people in the U.S. value their digital assets at nearly $55,000. And some of those digital assets are almost certain to be lost if the owners do not take time to list them in a will.
"I would advise clients to carefully consider all accounts and communicate details to permit access to his or her executor," Mr. Parker said. "If access to these accounts is not available, it can create tremendous headaches for those responsible for dealing with an individuals assets after death."
Tim Grant: email@example.com or 412-263-1591.