A list of passwords for online accounts can save loved ones unnecessary anguish and trouble.
Here’s a real life example…
Bob, a retired production manager, is worried that he does not know any of the logins and passwords for online accounts belonging to his wife and brother, and they do not know his. At 72, he said his concern was not about Facebook or e-mail. It was for their financial lives, which have migrated online, making paper statements outdated. Now, when people die without disclosing their financial affairs to anyone, there is often no paper trail for executors to follow.
In its annual Wealth and Worth study released last month, US Trust said 45 per cent of the high-net-worth people it polled had not organised passwords and account information for their digital lives in a place where dependents or an executor would find them. (By contrast, the poll revealed that 87 per cent knew the location of important documents and most had a will.)
Much has been written about how family members struggle to get access to the e-mail and social network accounts of loved ones who have died. They have sentimental value much the way photo albums and personal letters do. But far less attention has been paid to the logins, passwords and answers to security questions that will give access to an online financial life.
In an era when far fewer records are kept on paper, spouses and children may not even know that some accounts exist. Think of savings accounts that are only online, or a rollover retirement account that has not been touched for years.
It’s not only something that needs to be addressed with an individual dying. If an individual becomes incapacitated, people typically plan for someone to have a power of attorney so someone can step in and handle their financial affairs. But now people are finding the attorney has to deal with their digital issues. They have to access your computer; they have to pay bills for you.
There are five things people need to think about to ensure a smooth digital financial transition if they become incapacitated or die:
- Maintain a list of your digital information
- Send the information to someone you trust
- Make sure other people know who has the information
- Leave instructions for how everything should be handled
- Note all of this in an estate plan and update it regularly
Contact the team at Leader Accountancy today to include your digital financial information in your estate plan!