ELITE ADVISOR BEST PRACTICES

User Names and Passwords and Logins—Oh, My!

Don’t let cyber-security issues or lack of planning cause a disaster for your heirs

By Hyman G. Darling

Key Takeaways:

  • Many advisers and affluent clients underestimate the degree to which their financial lives are controlled by access to their online information.
  • Documenting your updated online credentials (and agents) is an essential part of modern-day estate planning.
  • When someone becomes incapacitated, the guardian or conservator who needs access to the information is often blocked by the website’s privacy officer.
  • The person your client trusts with confidential login information can be the agent under a durable power of attorney and/or the executor of the will.


If you pay bills, bank and handle much of your financial activity online, your agents under your durable power of attorney, the executor of your will or the administrator of your estate must have access to that information in order to manage your financial affairs when you are no longer able to do so.

Even something seemingly as simple as canceling a deceased person’s account on a social networking site such as Facebook, LinkedIn or Twitter may be extremely frustrating and even heartbreaking for a fiduciary who doesn’t have the user name and password combination to access that account.

In cases where a person has died, most website security officers will allow access with proper documentation, such as a death certificate or certificate of appointment from a probate court, which appoints a fiduciary of the decedent’s affairs. When someone becomes incapacitated, however, the guardian or conservator who needs access to the information is often blocked by the website’s privacy officer, who may require a specific order from a judge. In fact, some credit card companies and other vendors will also not allow a fiduciary to have access without a specific court order.

The entire process can be quite frustrating and expensive, and it may also require the filing of separate documentation with the court. Very often, the executor or person with power of attorney spends countless hours tracking down information and attempting to locate and obtain access to the websites holding accounts of the deceased or incapacitated person. This may all be prevented by taking a few simple steps right now.

In this day and age, most individuals with Internet access have login names and passwords. In fact, it is likely that you have several passwords and/or user names for various websites, as some require a combination of capital and lowercase letters as well as numbers or symbols—and you may change them frequently.

All is well so long as you are alive and healthy. Unfortunately, a problem is likely to occur upon your incapacity or death if access to your login names and passwords is not available to the person with your durable power of attorney, your executor or your administrator.

Think about this. It is likely that you perform many of these important activities online: banking, booking flights, paying bills, and purchasing goods and services. Even Web-based email programs such as AOL, Gmail, Hotmail, etc., may contain vital information that will be needed by others once you can’t handle your own finances any longer.

You may not wish to share this private information with anyone during your lifetime, but in the event of incapacity or death, it is vital that this information be available to those who will handle your affairs. Certainly, with fraud and identity theft so prevalent, you don’t wish to share your passwords. It is prudent nonetheless to have them documented, so they can be accessed upon your death or incapacity.

How to share online access to financial affairs

You can keep this information private simply by telling whoever will be responsible for your financial affairs the login name and password for access to your computer and the location of a document there with all the necessary information. In this manner, if passwords are changed routinely and often, then the person who will act on your behalf merely knows how to access the information when it is required.

The person who is trusted with this information may be the agent under a durable power of attorney and/or the executor of your will. Often, the same person is nominated to serve as your client’s fiduciary. If there are two separate individuals or entities serving, then both may receive it, or one could be given the information while the other is provided with the knowledge as to who is in control.

Some people choose to keep this information in a secure place, such as a safe in their home or a safe deposit box. However, when you pass away, what happens if no one knows where the key is, or the combination to your safe? It is critical to trust at least one person with your “sacred” information regarding passwords. Perhaps a preferred option is to place this information in a sealed envelope and keep it with your original will and durable power of attorney at your attorney’s office. As passwords are changed and new sites are added to the list, the contents of this envelope may be updated or substituted.

In the past, when a person completed an estate-planning questionnaire for his or her lawyer, it required information such as names, addresses and financial accounts. In this day and age, it is also important to have access to an individual’s email, as many clients prefer to communicate through that channel, and their mail likely contains vital information.

In addition, if you are self-employed, access to your website, personal and business email, customer service departments, orders, marketing, etc., may not be available without passwords. This information is private, but crucial to have available if and when you become incapacitated or die.

Solutions

Naturally, this problem is providing an opportunity for businesses to offer solutions. Legacy Locker, SecureSafe, Entrust, Deathswitch and others will provide private storage and access to this information. Legacy Locker, for example, provides family members or fiduciaries safe and secure access to account information in time of need. It maintains information including email addresses, photo sharing accounts, online auction access and all other online information. It even allows storage of other private information, such as memoranda regarding the ultimate distribution of tangible personal property and any special information regarding end-of-life decisions, funeral arrangements, etc.

READER NOTE: Neither the author nor Elite Advisor Report (CEG Worldwide, LLC) has commercial interests in any of the vendors listed in this article.

When opening a Legacy Locker account, you designate the “verifiers” who will have access to the information upon your death or disability. This provides peace of mind regarding personal information privacy while you are living. Confidential information will be preserved in one place and distributed only under emergency circumstances. Fees are generally charged annually or as an up-front lump sum for your lifetime.

Conclusion

It is likely that safeguarding private information is going to be an integral part of preparing an estate plan in the future. This will provide peace of mind so you can be assured that your personal information will remain confidential until it must be accessed by someone responsible for handling your affairs or your clients’ affairs.


About the Author

Attorney Hyman G. Darling is chairman of Bacon Wilson, P.C.’s Estate Planning and Elder Law departments. His areas of expertise include all areas of estate planning, probate, and elder law. He is a frequent lecturer on various estate-planning and elder-law topics at local and national levels, and he hosts a popular estate-planning blog at bwlaw.blogs.com/estate_planning_bits. He may be reached at (413) 781-0560 or HDarling@BaconWilson.com