How can your family avoid password problems when you die? I recently met a surviving spouse who has no clue of her husband’s Quickbook password for the family business. We run into issues like this often when assisting clients after a loved one dies.
Barron’s recent article entitled “How to Ensure Heirs Avoid a Password-Protected Nightmare” explains that even financial planners may learn too late how difficult it can be to recover and access a loved one’s accounts after they pass away. Since we are much more paperless with our finances, getting access to these accounts can be extremely hard for heirs if they don’t have the correct information. That’s because digital versions are protected by encryption, multifactor authentication, and federal data privacy laws.
Create a list of digital accounts and instructions on how to access them. The list should include financial assets and social media and other accounts. Digital assets that loved ones or advisors may need to access following a disability or death include:
- Traditional financial accounts
- Cryptocurrency accounts
- Home payment and utilities accounts
- Health insurance benefits
- Email accounts
- Social media
- Smartphone accounts
- Storage and file-sharing
- Photo, music, and video accounts
- E-commerce accounts
- Subscriptions to streaming services, such as Netflix, newspapers, music services; and
- Loyalty/rewards programs for airlines and hotels.
Create a list of accounts, passwords, and access information, keeping it up to date as information changes, and letting a trusted person know its location, such as an executor or estate planning attorney. Without a password list, it can be a nightmare.
There are good password programs, like Lastpass, Nortons, or Apple or Google, that will store and remember this information.
Note that with every digital account, there’s a specific process that heirs must undertake to gain access, which you need to communicate clearly in your estate plan. Please make a list of all digital assets and their access information, but don’t include this in the will itself since the document is part of the public record in probate.
Being prepared well ahead of time can help your family avoid additional stress and delays as they probate your estate. It also ensures they don’t forfeit significant financial assets concealed behind an impenetrable digital wall.
Reference: Barron’s (Dec. 15, 2021) “How to Ensure Heirs Avoid a Password-Protected Nightmare”