This topic comes from a reader named Neil. He recently wrote to me, saying,
Right now, I estimate that I have in the range of 20 to 30 online login credentials that my wife would need access to in the event that I unfortunately pass away or become incapacitated. In terms of information security, I do the worst thing possible, which is to organize all my key login credentials in clearly labeled files that my wife can access in case of an emergency. Even within the files, I leave detailed instructions on what to do in case of an emergency.
I have found that there are just too many credentials – email, passwords, security questions, phone ID, etc. I just don’t know any other way of doing it. Firstly, I can’t remember them all, and my wife wouldn’t stand a chance into logging into all of these accounts without these files.
As I type this, I am thinking that maybe there is a PC storage facility service for sensitive digital information. I don’t want a high-cost PC back-up service. I would be happy with something that would allow me to save less than 1MB of notes for my wife. But, again, how secure is that?
Right now, my information is not on the web, so the biggest issue is someone who would literally and physically steal the drive. Your thoughts would be much appreciated.
This is a great question that I had to really give some thought to. And I recently experienced something that put it into perspective.
My stepmother passed away a couple of years ago, and I handled her estate and the trust that she set up. It hit me through this firsthand experience exactly what we’re up against in this digital age when someone we know – whether a spouse, a relative, or someone else we’re handling the estate for – passes away. And it’s about a lot more than just finances.
For instance, if you were to pass away, would your significant other have the password to your Facebook account? Facebook is not going to just give it to them. In fact, there have been lawsuits of folks trying to get access to Facebook or an email account of a person who has passed away. And loved ones often lose in court.
Our lives have become digital. And with the digital age comes some real headaches. Not only are login credentials important for those that pass away, but so is a list of the person’s digital assets. How are we going to handle all of this so we can pass this information on to those who need it, while also not jeopardizing the confidentiality of this information?
To answer Neil’s question, we’ll cover four critical steps to protect your digital assets and prepare them in case of your passing. We’ll also look at some tools that can help you now and help your loved ones down the road.
1. Create a “List of Everything”
The first thing to think about isn’t just about giving someone your login credentials. It’s more comprehensive. You need what I call a “List of Everything.” This was so important when I was administering my stepmother’s estate, and she did a great job of having this available.
A List of Everything is a comprehensive listing of your digital life. For instance, you have not only financial information online, but also email addresses, social media accounts, computer hardware logins, and subscription logins just to name a few. The List of Everything provides a total rundown of everything your loved ones should know about.
On this List of Everything, don’t put the actual passwords. This list is just to identify your online accounts. While lists will of course vary from one person to the next, here are some common digital assets to get you started.
- 401k accounts
- IRA accounts
- Other retirement accounts
- Mutual fund accounts
- Brokerage accounts
- Other investment accounts (e.g., Betterment or Motif Investing)
- P2P lending accounts (Prosper and LendingClub)
- Treasury Direct accounts
- Student loan accounts
- Bank accounts (e.g., checking, savings, CDs, and any online banking accounts)
- Car loans
- Other debt
- Money management accounts (e.g., Personal Capital, Mint.com)
- Credit monitoring accounts (e.g., myFICO, Credit Karma, Credit Sesame)
- Credit cards
- Amazon Prime
- Home security
- Safe deposit box
- Cash rebate sites (e.g., Ebates, Big Crumbs)
- Airline mile accounts
- Hotel rewards accounts
- Life insurance (including policies you may have through your employer)
- Car insurance
- Homeowner’s insurance
- Health insurance
- Extended Warranties
Social Media & Email
- All email accounts
- All other social media accounts
If you have your own business, that doubles or triples the list of things I’ve just mentioned. Many of them will be duplicated because you’ll have business versions of monthly payments, bank accounts, credit cards, and insurance policies. Your business may also have direct deposits, automated payments, and accounting systems that your spouse or another person needs to know about.
As you’re making your list, think, too, about your email accounts. This is something my stepmother did well, and it was very helpful. Sometimes the accounts would get notices from creditors or subscription service providers. Having access to those accounts allowed me to be sure I’d found and accounted for everything.
Now we haven’t gotten to the point of saving password information with this List of Everything. But it’s essential that you start with a List of Everything, especially for your financial accounts. As an example, my 401(k) is with Fidelity. As long as my wife knows I have a 401(k) at Fidelity, she can gain access to that account, even without the password, and even though it’s only in my name.
Fidelity has an entire department that deals with estate issues when an account holder passes away. So even if my wife doesn’t have the password information, she can call them up and gain access to that 401(k). Usually they’ll ask for a death certificate, and on many accounts like this, you’ll have directly listed a beneficiary. In our case, my 401(k) would go straight to my wife, without passing through probate.
The point here is that because she knows about this account, she could reach out to Fidelity to get it properly processed – without ever knowing the password. That’s why this List of Everything is essential.
The financial accounts were the scariest thing when I was administering my stepmother’s estate. I wasn’t concerned about having passwords. My concern was whether I had identified them all. It can be hard to tell without a comprehensive list. Did she have an asset or loan I didn’t know about? Does she have liabilities that aren’t listed? Maybe she signed up for a subscription service that hits her account every month, but I don’t know about it. That was the biggest concern – what am I missing?
So that’s why when I began my own planning, I began with a List of Everything. It’s something I highly recommend you put together, so that if you were to pass away, those who would need this information would have it.
You can draw this up in a Google document or Word, and share it or print it out. Perhaps email the list. It doesn’t need to be handled too cautiously because you’re not putting any confidential information in it. It’s simply a list of your accounts and where to find them.
Two Bonus Tips
Before we move on, I have two bonus tips:
1. Talk about it. You really need to talk about this stuff periodically. I know it’s easy to get busy with life and kids and everything else. Who wants to sit down and talk about what happens after they die?
My wife and I have started something recently where we go out for a cup of coffee once a week and we talk about our goals and plans for the week. Then we hold each other accountable on accomplishing what we want to accomplish. Our goals can be work-related, deal with personal relationships, or be related to money.
In our last meeting a few days ago, I took time to walk my wife through all our investments and how we spent our money the previous month. She’s not going to remember it all, but it’s a start. And it’s something I want to do regularly so she knows where things stand. In our family, I handle the finances, which works for us. But she needs to have some understanding of where the money is coming from and going to.
If you’re in a similar situation – or even if you only handle certain portions of the finances while your spouse does the rest – talk about it periodically.
2. Consider using EverNote. EverNote is a very flexible and useful tool, and it’s free at the basic level. It’s a great way to store information you want to share with others.
You could, for instance, have a separate “List of Everything” notebook. You can add typed notes. You could also add websites, such as financial accounts to the notebook. You can share the notebook with your significant other.
Again, don’t put anything confidential in here. It’s just a way to give someone a List of Everything that covers, literally, everything.
2. Access to Email is Critical
I’ve already touched on this, but it’s an important point. When I was administering my stepmother’s estate, having access to her email proved to be incredibly useful.
I’d monitor her email accounts to see notices from credit card accounts, insurance, and other accounts. One time, she got an email from Dish Network. I didn’t even know she had Dish Network until that email came in. That email is what let me know to call up and cancel the service.
And even though access to email is so important, it’s the one thing you may have the most trouble gaining access to if you don’t have the information. Oddly enough, investment accounts are easier to gain access to in the event of the death of an account holder.
But with email – and other accounts like Facebook – they can be very stingy about giving access, even if the account holder has passed away and you’re the beneficiary or the one handling the estate. There have been lawsuits over this issue.
Hopefully, you’re comfortable simply sharing your email or Facebook passwords with your significant other. In any event, make sure they can at least gain access to that password if something should happen to you. It’s really important.
3. Make it Easy to Locate Documents
Documents are at least as critical – if not more so – than email access. Important documents include the obvious things – the will and trust. But you should also think of other important documents, like the deed to your home, birth certificates, passports, medical directives, and bank and investment statements. Even documents as simple as warranties for your furnace or the last gadget you bought should be accessible.
One approach to this, if your comfortable with it, is to scan these documents and then store them electronically. My wife and I use a SnapScan, for instance, for Apple. It scans anything – from my driver’s license to a full-sized document. It automatically scans both sides if there’s writing on both sides. Neat is another scanner option that is very popular. Once the document is scanned, I save it to Dropbox as a PDF.
Even if you do scan these documents, be sure you keep the originals in a secure location. You can scan and toss statements and other less important pieces of paper. But with more important documents – your deed, will, passport, etc. – you’ll want to keep the original, as well. But having them scanned can give your significant other easy, immediate access as necessary.
If you do decide to scan and save these documents electronically, you should think about encrypting them. You can do this if you save the documents to Dropbox. Or you could keep them on an encrypted thumb drive.
Bonus Tip: You can password protect a PDF for added security.
4. Find a Way to Pass On Your Passwords
Once you’ve located all your important documents and information and made your List of Everything, it’s time to think about storing your passwords. There are several ways to store your passwords so that they’re later accessible by your significant other or estate administrator. Here are three:
1. The paper method
My stepmother had four sheets of typed credentials that included login information and passwords for everything from her bank account to her investment accounts. She was a pilot, so she had lots of flying related login credentials, and plenty of hotel and mile rewards accounts. She even included her Netflix login.
Everything was on paper, and that worked fine. But this method has its drawbacks.
For one thing, every time you change a password, you have to update the paper. And of course, you’re eventually going to forget to update the document. And then you’ll wind up with an out-of-date list of login credentials.
The second issue is one of security. Maybe you can put that paper somewhere safely in your home. What are the odds someone is going to break in and think to steal a hidden piece of paper, after all?
But with the paper method, you may leave yourself liable to fraud from friends or family. You’d hope that your loved ones wouldn’t find this document prematurely and do something improper with it. But it does happen. And that would be my bigger concern with keeping sensitive information like this on paper.
2. Keep a digital file
The reader Neil, who wrote in with this question, keeps his information as a digital file. You could keep this information on a hard drive or a thumb drive, or you could save it in the cloud using a service like Dropbox. This is an option, but it, too, has some drawbacks.
For one thing, it’s like the paper method in that you have to remember to update the password each time you change it. So if you forget to update the file, you’ll wind up with an out-of-date list of credentials. And an out-of-date digital file is as useless as an out-of-date physical file. You also need to remember to update the file every time you add a new account.
And, of course, security can be an issue with a digital file. Again, you can choose encryption through Dropbox or an encrypted thumb drive. Those are both decent options. But you do need to ensure that your spouse or significant other knows how to access that file, too.
3. Try a service
There are a number of websites now that will let you securely store all of your digital assets. With these services, in the event of your passing, you could have a directive that would allow your beneficiary or estate manager to access that information.
These services are serious business. They typically require a death certificate, much as a bank would in the same circumstances. Once they get that, the service would release information, according to your directives, to your spouse or an attorney or whomever you designate.
In the past, I’ve used LastPass, which is a free tool that lets you generate complex passwords and then saves them for you. When you go to a site with a saved password, it can automatically log you in based on the information that it’s saved.
Now, I’m looking into another service, called Password Box. It has some of the same features, and a few that LastPass doesn’t offer.
One of the Password Box features is called the Legacy Locker. You can set it up so that if you were to pass away, Password Box, upon receiving your death certificate, will follow your instructions and provide the information in the Legacy Locker to your beneficiary or someone else.
This is a really cool service, and it’s free for up to 25 passwords. If you go above that, it’s only $11.99 a year. So it’s a very cheap tool, and it has a lot of functionality. I like it even better than LastPass even for just storing my passwords. It seems to work a little better and more smoothly.
It also has other features, like a digital wallet that lets you store all your credit card information securely. You can even create secure notes within the Password Box, which will be passed on to a loved one or whoever in the event of your death.
These digital assets are more important than ever. But your approach to them is different from just tossing your documents in a lock box until you die. However you deal with these assets, the important thing is to not ignore them. Make a plan, and be sure the proper people can access your digital assets in case you should pass away.