If you're a successful seller on eBay, Amazon, or other online site, you probably have a tidy sum in your PayPal account - at least from time to time. To access the money in your account, you enter your email address and a password you've selected. But what happens if you are physically unable to do this - you are incapacitated by a car accident or serious illness, or even worse, you die. How will your spouse, partner, or other person you would want to have access to your account get it? According to attorney Martin Shenkman of LawEasy, plan ahead:

• Decide who is legally allowed to access your account (and make sure there's the right paperwork to prove it).
• Give this person the information needed to gain access to your account.

Incapacity
Say you're laid up and don't have the physical ability to log on to PayPal, but it would be helpful to use the funds in your account to pay your bills. If you've made no provisions before becoming incapacitated, it could be a lengthy (and costly) process to enable someone else to get to your funds - even though the money would be used for you. Your spouse, a friend, or someone else may need to go to court to get authority to go into your PayPal account. Then the person will have to haggle with PayPal for access or use a computer expert to crack into your password-protected account.

Best strategy: Sign a durable power of attorney giving someone the authority to handle your financial affairs when you cannot do so. The actions that your agent (the person you name to act on your behalf) can take under a durable power of attorney can include access to financial accounts, including your PayPal account. As practical matter, your agent probably won't have to give the form to PayPal; it's a legal protection in case your other relatives question the agent's access to the account.

But signing a durable power of attorney is only a half measure. You also need to provide the agent with your email address and PayPal password. Many people use multiple email addresses; be sure to specify which one you use for PayPal. Tell your agent where you store your PayPal password, along with passwords, PINs, user IDs, and other secret codes for accessing other online accounts and websites. You may have a written record you keep near your desktop, or you may use an online solution or software for a password record keeper, such as Passpack.com, Cyber-Ark, or RoboForm.

Death
When a person dies, the authority of a durable power of attorney ends; estate laws take over. The money in a PayPal account becomes part of a person's estate after he or she dies.

Ownership of the funds in a PayPal account depends on the distribution of assets for the entire estate. If there is no last will and testament, then assets are distributed according to the laws of the state in which the person was "domiciled" at the time of death (generally where the person had his or her main home, voted, paid state income taxes, etc.). Each state has its own laws for the distribution of estate assets in the absence of a will.

The state's distribution rule may or may not reflect a person's wishes regarding assets. It depends on whether there is a surviving spouse (not merely a domestic partner or long-time live-in), children, parents, etc. In New York, for example, if there is a surviving spouse and no children, the spouse gets it all. If there is a spouse and one child, the spouse gets $50,000 plus half the remaining estate; the child gets the rest. With two or more children, the spouse gets $50,000, plus one third of the estate; two thirds go to the children. If there is no spouse or child, the parents inherit the estate, and so on.

Best strategy: Factor in the funds in the PayPal account in your overall estate planning, and then include directions in your will to reflect your wishes. Decide who you want to inherit the funds in your account. The funds can be added to all of your other assets and distributed according to your wishes. For instance, you may want 40% of your estate to go to one relative, 30% to another, and 30% to a friend.

Caution: If you use a revocable living trust as the main way of handling your estate, you might want to title the PayPal account in the name of your trust to make it easy for your trustee to manage the account in case of your disability or death.

Alternatively, you can specify that the funds in your PayPal account go to a specific person, or even to a charity.

Again, be sure that your executor, administrator, or personal representative overseeing your estate has your email address and password for PayPal access.

Bottom line
To ensure that the money in your PayPal account is used as you see fit, plan ahead. It's a good idea to work with a knowledgeable estate planning attorney to make sure that you have the appropriate documents to carry out your wishes and that access information can be found when needed.