When most people think about bequeathing their belongings, it's the obvious: the house, the car, bank accounts, the sentimental family mementos.

But what about our online "stuff"? With so many of us emailing, blogging, tweeting, Facebooking, eBaying and otherwise living online, it's clear that a huge portion of ourselves resides on the Web.

"Go through a day and think about how many things you do on the Internet … What happens to that virtual life when real life ends?" said Amy Halloran, a Sacramento estate planning attorney.

It's a question that's becoming increasingly relevant in a digital age. The average person often has a handful of websites or email addresses to their name, not to mention PayPal, LinkedIn, Flickr and other online accounts.

When it comes to writing a will or a living trust, these so-called "digital assets" often get overlooked. Yet dealing with them can be just as crucial as deciding who gets the family silver or the Toyota truck in Dad's driveway.

"We're seeing these issues with increasing frequency," said Sacramento estate planning attorney Mark Drobny. "If something were to happen to you tomorrow, who would you want to access your accounts?"

The solution can be as simple as writing out a list of your online accounts (with user names, passwords and the designated person to handle them), or as formal as inserting your online wishes into a legal document, such as a will, a living trust or a power of attorney form.

It's not just a matter of deciding who gets the leftover balance in your PayPal account or the use of your business domain name. Designating someone to handle your online life after death can avoid heartache, too.

Drobny recalls a case several years ago in which a Sacramento County business owner died unexpectedly in a shooting accident. Unbeknown to his grieving widow, a disgruntled employee with access to the husband's business accounts was sending out "venomous" emails, accusing the wife of causing her husband's death.

Once the libelous messages were discovered, "It took us forever to shut down that email account while this person was spraying these false statements," said Drobny.

All of the family's emotional suffering could have been avoided, noted the attorney, if the business owner had left his wife, a trusted friend or family member with a simple list of email user names and passwords. And instructions on who should – or should not – have access.

Then there's also the emotional wallop to friends and work colleagues when a deceased person's name continues popping up on LinkedIn or Facebook messages. Unless those companies get officially notified of a death, the deceased person can continue to "live" online.

In the last few years, a new crop of businesses has sprung up to help people avoid those scenarios. Companies like San Francisco-based Legacy Locker and Entrustet in Madison, Wis., let you designate a "digital executor," someone who gets access to everything from your Facebook page to the 6,300 travel photos you've stashed on photo-sharing websites. They're given authority to execute your wishes on what accounts stay open, get transferred to someone else or get deleted forever.

Nathan Lustig, a 26-year-old entrepreneur who co-founded Entrustet with a college friend in 2008, said he and his partner got inspired after reading about a young U.S. Marine killed in Iraq whose parents had to go to court to gain access to their son's Yahoo email account.

"We were pretty moved by that story and thought it was crazy there were no solutions," said Lustig, whose company now claims 10,000 users in 23 countries.

In another case, a college student acquaintance died of a drug overdose and people began posting on his Facebook wall "a lot of inappropriate stuff that you wouldn't want your girlfriend or parents to see," Lustig said. The hurtful comments stayed up for weeks until the Facebook account was able to be closed.

"If you're a young person with a thousand friends," Lustig said, it's worth sparing your family that kind of pain by designating someone to delete your Facebook page "so no one can see it or … to nominate a friend or family member to have access to it."

The concept of designating an online executor appears to be getting more mainstream. "When we first started, we got a lot of blank stares from people not getting it or not being able to relate to what we were doing. But there's clearly been a change in the last three years," said Lustig.

These types of sites let you create a free, secured online list of accounts, beneficiaries and a designated "digital executor." Fees for advanced services, such as Legacy Locker's "farewell notes" delivered to loved ones after you're gone, cost $30 a year.

Most online accounts, such as Facebook and Gmail, have stated policies on how to close a deceased person's account (see accompanying box). But they all differ.

For instance, photo-sharing site Flickr, which is owned by Yahoo, says company policy is to ensure customers' privacy, even after death.

"While we deeply sympathize with any grieving family, protecting the privacy of our users remains our priority," said company spokeswoman Claudia Collins in an email. Users who want their photos to stay "accessible to their legal heirs should work with their attorneys … as part of their estate planning process."

There is a simpler solution, Drobny noted.

"Write down your passwords and put them in a sealed envelope. Stick it in a book on your bookshelf. Then tell a trusted friend where it's located." Or keep a copy with your will or trust documents.

In any case, it should include your instructions to a trusted friend or family member: for example, delete Facebook, shut down eBay, transfer a domain name, give online photo files to a sibling, etc.

For those concerned about keeping that information secure, Halloran sometimes recommends that parents give a sealed list of user names to one adult child and a separate list of passwords to another child.

And note: Typically, online music and movie files like iTunes are purchased for personal use, but are not considered your property for handing down to friends or heirs. Financial accounts, like banking and investments, are considered "physical" assets that would pass to your heirs.

If you don't make provisions for what happens to your online accounts after death, your family could be left to navigate uncertain legal terrain, as there is little case law on these topics.

In an online world, how to handle digital assets is "going to become a bigger and more prevalent issue," said Halloran.

Deciding what part of your online life shuts down and what gets passed on when you do, she said, "is one of those think-aheads."

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Have a personal finance question? Call The Bee's Claudia Buck, (916) 321-1968.

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