When thinking of estate planning, most people don’t really think about their digital estate. So what is it and why is it important to include it in your estate planning?

Our digital estate is made up of our digital assets. Our world is tech heavy. Most of us have an email address and a mobile phone. Our photos are digital (and that’s where they say, never to see the surface of glossy photo paper). According to statistics from Social Media News, there are 15 million Australians who are steady users of Facebook, more than 5 million WordPress users and there are 5 million Australians who are monthly active users of Instagram. And everything you have on these sites make up your digital estate.

All of the companies that oversee services like Gmail, Hotmail, Facebook, Twitter and Dropbox have rules about who can access the accounts. In a nutshell, if you don’t have the correct username and password it can be an absolute nightmare to then get permission to access any of the digital data.

A Canadian widow found out just how hard that was when her husband died and she wanted to get into the Apple account to use an app on the iPad she shared with her husband. Peggy Bush’s daughter, Donna, said she called Apple to ask for help to retrieve the password. She said she was told that unless the family wanted to start a new Apple ID account and re-purchase everything they’d paid for, they would need a court order to find out the password. ‘I said that was ridiculous, because we’ve been able to transfer the title of the house, we’ve been able to transfer the car, all these things, just using a notarized death certificate and the will,’ Donna Bush said.

Brisbane lawyer and wills and estates specialist Brian Mitchell says people’s digital information can be "nightmarish" to negotiate. Much of it is legally untested and covered in multiple jurisdictions. He says that with digital music held on iTunes "you don’t actually own anything in your iTunes account. You are leasing those songs from Apple. So what happens if someone wants them when you die?" The trend towards fingerprint access to some digital devices complicated the issue further. Your grief is already real – imagine being asked to provide the fingerprint of your deceased loved one to access their device.

This issue, which is only increasing with time, is big enough that there are now companies you can employ to help get access to a dead loved ones’ digital property. Pedram Afshar from the Sydney company eClosure says his company can shut social media pages, but he says a client from Queensland lost their adult son to suicide late last year and cannot access his Google account or gmails without a US court order.

A digital estate assets plan, sometimes also referred to as a digital estate inventory, is a list of all of the digital or online assets that a person uses. Including something like this in your will makes it much easier for your family to access these assets when you die. "Increasingly people are thinking of this and making an inventory," says Kathy Wilson, chair of the Law Institute of Victoria’s succession law committee. "But it is interesting how slow most people are, considering how quickly social media is moving. My advice is to keep a record of everything and give it to the executor of the will in a sealed envelope."

If someone doesn’t have your passwords and usernames for your social media and email services it can be not just disappointing but downright devastating. This was the case for Karen Prangley and her brother when her Dad, Greg died, having been unable to communicate passwords necessary for his business to keep running. In 2009, Greg Prangley suffered two strokes and then woke after a week in a coma with a memory that was beyond repair. "My brother and I tried to communicate with him via paper, pen, anyway to get into his email account where he ran his business from," Karen said. But Greg was unable to remember his Yahoo password and within a month, because his entire business was tied to that account, the company collapsed.

It’s not hard to see how this could happen. A business that sells products or services online needs to be able to access the website and email account, at a minimum. What happens if you can’t?

Tasmanian lawyer Kimberly Martin says Australia needs laws to give executors control over the digital estates of friends or family who have died, even if no list has been made. She says the inventory could be a handwritten list, a computer file or an encrypted digital file, and could include valuable things such as domain names, online businesses or bitcoins, but more commonly would hold data of sentimental value such as photographs and emails. These might be held in cloud storage or on third-party hosting sites. A digital asset can range from passwords and usernames to software registration codes, images, audio, video, email and documents and can often be spread across multiple platforms with different policies – a "parallel succession regime", says Martin.

Keep a list (whether on paper or encrypted on your computer) of all of your login and password details for all of your online accounts. Once you start compiling a list you will be surprised by just how many you have. This list can be included with your will, but the problem is that passwords change so often that it probably won’t be kept up-to-date. Having a physical list or an encrypted version that your executor can access ensures that the information they are given is more likely to be current and helpful. Here is a list of suggested digital accounts you may have:

social media sites (such as Facebook, Twitter or Snapchat)

email

banking and other financial sites (superannuation or share portfolios)

government services (Medicare and Centrelink)

phone and internet accounts

electricity

local council services

shopping sites

blogs

cloud storage

And there are so many more that you may be able to add to this list. If you have digital music accounts (such as iTunes or Google Play) you may not be aware that a lot of digital entertainment cannot be bequeathed because you do not officially own it. Those accounts only allow you a license to use them, not to own them, so they are not your property to pass on.