Digital estate planning: Does anyone know your passwords?

In a past post we discussed the challenges of dealing with our digital property like music, photos, and emails in our estate plans. Figuring out what to do with correspondence and other digital belongings is one element of estate planning that is changing with new technology, but it isn’t the only one. In addition to thinking about those issues, Texas residents should also take time to think about another issue: access.

Access to our digital lives is much more difficult to pass along than a pair of keys to a home or the code to safe. This is because we store our information in dozens of different accounts with various passwords and usernames that may or may not be written down anywhere. And while it is a relatively simple process to shut down a loved one’s Facebook account without password access (the site itself can help with that), it is quite another issue altogether to gain access to things like online banking or automatic bill paying.

While many of us have migrated our financial affairs to online platforms rather than paper statements, a recent study showed that 45 percent of high net-worth people who were polled had no organization system for passwords or online account information. This is a problem not only for access purposes, but for finding all of the assets that someone has after they pass away. Many people do not realize that after they pass away, family members, the probate system, and their named executor will all go on a hunt to make sure that there are no secret accounts or properties, or unknown children who are not listed in the a will. Without a paper trail to follow and no account login information to tell them where to look, executors are often at a loss to notify banks or portfolio managers that someone has passed away.

Readers: Do you have your digital life organized as a part of your will

Source:New York Times, “Leaving Behind the Ditigal Keys to Financial Lives,” Paul Sullivan, May 24, 2013.