2/2/2011 5:04 PM ET|
Don't take passwords to the grave
Your survivors will have enough on their minds when you die, so take steps now to ensure that they’ll be able to access your digital accounts.
When my father had a stroke while on vacation, my stepmother was flummoxed. She needed access to their joint checking account, but he had always handled their money, and she didn't know the PIN needed to get cash from an ATM.
The best my dad could do, in his brain-damaged state, was recite various numbers over and over -- none of which was the elusive PIN.
Bank officials eventually gave my stepmother access to the money, but the incident illustrates how dangerous it can be to have essential financial details, including online IDs and passwords, locked in one person's head.
If you die or become incapacitated without sharing the keys to your digital life, your family could face a huge ordeal trying to manage your affairs. They could be cut off from money to pay your bills, and they might not even know which bills need to be paid. They might not discover some accounts exist if you've gone paperless. They would likely have to go to court to win access to your financial accounts, then face skeptical customer-service representatives who may not accept their authority.
Any delays could cause serious financial repercussions for you, should you recover. Unpaid bills could devastate your credit scores and wind up in collections. Insurance coverage could lapse. Bounced checks could result in your bank accounts being closed. Neglected investment accounts could suffer losses.
If you die, your family could be left with a traumatizing mess. They may have to scramble for cash to pay for your funeral and their own living expenses, if they're your dependents. If they can't track down all of your accounts, some of the money you intended for them might wind up in some state's unclaimed-property fund.
And that's just on the financial end. Your family could be cut off from other important digital files, including:
- Photo and music collections stored online.
- Calendars and address books.
- E-mail and social-networking accounts, including Facebook, Twitter and LinkedIn.
- Security and wireless-networking software.
The better you are about security -- creating strong passwords and changing them frequently, as you ought to -- the worse the situation for your family, since they won't be able to easily guess your online keys.
Since this is a digital problem, you may not be surprised to learn that there are websites offering digital solutions. Legacy Locker and InformationSafe are two sites that promise to serve as online safe-deposit boxes for your critical information and to release it only to people you designate.
Password-management software, including KeePass and LastPass, which allow you to access all your password-protected sites with a single master password, is another digital option. As long as you provided the master password to the person or people you trust to handle your affairs, they could get access to your online accounts.
I'm not comfortable with 100% digital solutions, though. For one thing, you're relying on these companies to still be around when you or your heirs will need them most -- and nothing is guaranteed in life, let alone online. For another, they may not be as comprehensive a solution as you may need.
A more comprehensive approach
So I advise a belt-and-suspenders approach that would cover you no matter what. Consider using the online solutions for convenience, but also create a physical document you can store with your attorney, in a safe-deposit box or with a trusted person who lives outside your immediate area, in case a widespread catastrophe such as a hurricane, earthquake or flood compromises those first two options.
Update your critical information at least once a year and include answers to common security questions, including your mother's maiden name, the street where you were raised and the name of your first pet, said Martin Kuritz, the author of the estate-planning organizer "The Beneficiary Book" -- which, not coincidentally, can make this chore easier.
VIDEO ON MSN MONEY
Exactly dbellis! It's a great idea to keep lists of accounts, etc. in case of emergency. But there are legal ramifications here people, and you need to consult an estate attorney to do this right. Using someone else's account name / password to access a financial account after they're dead is illegal, even if you're the rightful heir. You can get into seriously hot water if you take money out of a parent's account, for example - even if they're just disabled and in the hospital! You need a power of attorney granting you permission, or you need to be a joint owner on the account to access it. Take the time to set up the accounts with proper joint owners with rights of survivorship, beneficiaries, and powers of attorney. If it's set up properly, then all you have to do is provide the right paperwork and you'll be given access.
You could create a spreadsheet - then put this information on a "thumb drive" and entrust that to the person who would need to get access to this information. This is especially helpful if that person lives in a different state, etc. Then if they needed to access it - they would have it.
This is really important because a family member was in a coma for 2 months and even though she came out with relatively few health problems, she could not remember many of her passwords to common accounts. It would have been so helpful to her recovery if they could have gotten into her email, social networking, etc. for therapy on how to do many common day to day things again.
dbellis covered this topic well.
One additional issue that scares me... Where do you store the document you create with information about how to accessing your entire wealth? Surely not in a spreadsheet on a computer linked to the internet, and not in hardcopy for someone inappropriate to find. Maybe a safety deposit box? Then there's that pesky key...
Good Advice because you need a new pin number for everything, I do all the bill paying, shopping, and banking however I have always kept a locked box with all the pin numbers in it incase my husband needs to get into something, I also put in the security question answers that are necessary as well.
The recommended solutions make sense, especially the part about not relying on an online company to still be around. Plus there's the data security issue. I like Record Tree, and have recommended it to many clients. RecordTree.com is pc-based, and prints reports, and stays encrypted on your machine. I understand a new version is on the way, with Mac compatibility. The best part is the exhaustive lists of important documents, contacts and resources your loved ones will need.
There is another site called eFarewell that offers this service at no charge, and you have the ability to leave a 20 minute video message to your loved ones. The message and any other multi-media information you choose can be vaulted until after your death.
Many of these comments show a lack of reasonable experience, or a spell checker.
if U leave the info to 'someone U trust', that is a weak link. Living Trusts are a far better than the cookbook approaches discussed in the comments, but they are overpriced and people get taken advantage of.
But probate (even with a 'notebook' will) can deplete assets
If the safe deposit box needs to be opened after a death, this is a standard procedure and therefore there is some protection.
i see a lot of denial and ignorance in the comments; I have yet to read the article but I bookmarked it anyway.
Haha, the people who gave my last comment a "thumbs down" are the same ones who will waste half their lives keeping-up with the social cliqueness by-product of technology, rather than using it to their advantage to do something useful. Have fun forming your identity around Jersey Shore episodes and new iPhone apps, robots :P
"Face book account and other "social network accounts", when you are dead"?--Are these the same people talking here all the time about "those who have millions" to invest for retirement ?--most of those (95 %) have no idea, what Face Book is!---They found something better: "MONEY"
Why is a problem with the password any different from your computer taking a hike? (far more likely) (I change a dead laptop on average every 19 month for all my people.)(This is why most companies copy their hard drive every night, either manually or automatically) (now for 30-40 years).
You are putting far more into this than anyone at the top(courts, banks, tax) care about (they do not really care if you can open your account on line at all). In reality no one cares about your computer or pin except those in your family who wants to quickly see who you really are!---(including FB)
NO ONE better go into your money account/s when you just died. (that includes you marriage partner, especially!--especially if any questions come up later about anything in court.
And finally: You do not have to pay any bills when you are dead, they have to sue the dead person, and that is usually dropped--since lawyers do not work for free either!.
You get a death certificate from/for your "loved one", and go to the bank and a few other places to get the dead persons finances done--all of them (and tittle transfers).
No, Face Book is not even listed on the court papers!
Get real people!
OH--So much for paperless!!--I am sure you print everything out at home for your records anyway, if you have any smarts--so is it really paperless? No, dear friends it is "stamp less" so they can make more profits.--But they tell you about the "green"--but trust me it is all about the "green" (their money) ---not the trees!----You always take a receipt at the gas station fill, right--if you do not, do not bother to battle any wrong bills from the credit card company, if your receipts are non existing!
Yes, and the post office is dying!
But remember you always pay money every time you use a credit card (higher prices (1-7 % (especially in EU)), I see some gas stations are starting to charge extra 10 c for gas again--so they can pay for all that much mileage you get "for free"!
RU Kidding Me - You are the exact person attorneys like. One's that dish out hundreds of dollars on estate planning and power of attorney's. All you need is a simple will designating everything to the respected beneficiaries. My parents have wealth, properties, and assests. Neither would mind if my sibling or I went in in the event of an accident to withdraw money to pay for final expenses and then split everything amongst ourselves. Creating complicated estates and power of attorney's becomes complicated. Why bother?I am glad I won't have to deal with any of that...
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