|Wednesday, October 1, 2014|
What Was Grandma's Password?
Until she died at age 94, Jeremy Toeman's grandmother e-mailed friends and family around the world and played bridge on Yahoo.com. "When she passed away, my father and I wanted to reach out to the people she knew and notify them, but we couldn't get into her Hotmail [e-mail] account," says the San Francisco resident. "My wife and I had our first child that same year. One day I was on a plane, and I thought, if it went down, my accounts—LinkedIn, Facebook, PayPal, E*Trade, and others—all these things I own would disappear."
It's a realization many people are coming to in this digital age. You read stories about soldiers killed overseas whose families can't access their e-mail accounts to read and save their last messages. Or spouses who have to hire lawyers to get access to and delete their deceased partners' Facebook pages. We tend to plan carefully for the disposition of our physical assets at our deaths—homes, cars, and the like—but many people forget to plan for loved ones' access to their digital assets.
Lost memories and money
"There have been cases where data were lost, and e-mails were trapped forever," says Toeman. "More importantly, people have accounts that have money sitting online, at eBay, PayPal, or even online poker. I own about 90 Web domains that I keep at Go Daddy and those would vanish if I passed away. If my wife had access, she could auction them and make tens of thousands of dollars."
On the personal side, Facebook's policy is to put deceased people's accounts in memorial status. "To many people that's awesome, but my wife and I have talked about it and she wouldn't want to see people posting to my [page]," he adds. "And it's pretty typical in households for just one person to manage the digital photo collection. I manage ours on Flickr. The account is locked, and thousands of family photos from over the years would be lost."
Don't forget automatic payments that you've set up through financial institutions or directly with businesses.
Secure your financial inventory
So does that mean you should give a relative or close friend a list of your user names and passwords? Not when it comes to your financial accounts, cautions Doug True, chief lending and technology officer at Forum Credit Union and president of Forum Solutions, Fishers, Ind.
"We wouldn't encourage our members to share user names and passwords with relatives as we don't feel it's prudent," he says. "Instead, we'd suggest a financial inventory stored in a secure place, with a listing of the financial assets, how they're structured—investment specifics, beneficiaries, what documents are on file—and how to contact the institution holding the assets."
Don't forget automatic payments for things like utilities, cell phones, and newspapers that you've set up through financial institutions or directly with businesses. "Your heirs need to be able to go in and stop those so your estate's assets aren't depleted through bills unnecessarily continuing to be paid," adds estate planning and administration attorney David A. Shulman, Fort Lauderdale, Fla. "And it's a good idea to secure your will and other important documents with your financial inventory."
Check with the professionals at your credit union about estate planning guidance.
Robert Rutkowski, managing attorney of the Chicago office of Weltman, Weinberg & Reis Co., L.P.A., recommends securing your financial inventory and important documents in a safe deposit box. You can include lists of your social media and other online accounts, too. Check with your credit union to see what safe-deposit box options it offers.
Secure online storage
There now are online options for securely storing your financial inventory and other important documents. After Toeman had his in-flight revelation about the need to make his digital account information available, he was determined to take action. The moment the plane landed, he called his business partner, Adam Burg, and the two hatched the idea for Legacy Locker, of which Toeman is CEO and Burg COO.
The highly secure site, modeled after financial institution online banking sites, is independently audited by McAfee, which offers online virus protection software and intrusion prevention solutions. Legacy Locker is an online repository for people's digital property, and it lets accountholders grant access to designated loved ones in case of death or disability. AssetLock provides a similar service.
"It's like a digital safe-deposit box," Toeman explains. "There are free and paid versions, and each user establishes a 'verifier,' a person who can verify if the user has passed away." People can scan and store their wills or other important documents on the site, along with letters to be sent to loved ones at their deaths, and can designate a beneficiary for each document stored.
Don't take your passwords to the grave.
To prove disability or incapacity, Legacy Locker requires a written explanation signed by two physicians, at least one of whom is the person's primary care physician, certifying that by reason of illness or mental or physical disability, the person is unable to manage his or her affairs.
Shulman has concerns about password protection software programs. He fears that someone who gets access to a deceased person's passwords on one of the programs could drain financial accounts that an estate plan should control. "Note that even without [a software program] this is a problem," he acknowledges. "If you gave a paper listing of your passwords to anyone but the person responsible for administering your estate, they could clean out your accounts before anyone knows about it."
Toeman says Legacy Locker complements users' estate planning. "We recommend that users set up Legacy Locker in conjunction with their estate planning, and that users' digital verifiers be a family's lawyer or estate planner," says Toeman. "Then the estate planner doesn't need to retain your user names and passwords; those can reside in Legacy Locker. It's more convenient that way because you should be changing your passwords every few months anyway, and then you can just change them on Legacy Locker, too, rather than having to contact your estate planner."
Anything with a logonWhether you choose to use a physical safe deposit box, available at some credit unions, or a digital one, make sure you have a complete list of all digital accounts—anything with a logon—securely stored with instructions for your designated representative to have access. Don't take your passwords to the grave.
Home & Family Finance® Resource Center