Broker Check
Where's the Trail?

Where's the Trail?

February 01, 2022

I have a “to-do” for you. Could be you already “have it covered.” If so, well done.

The task at hand, while not fun—perhaps a little morbid—but vitally important, is this: Does anyone know how to access your digital assets and accounts if you were to become incapacitated or pass away? Or, if you were to be named the executor of one’s estate, would you know how to access their information?

When one passes away without a password list it can be nightmare for their loved ones. Unfortunately, it is becoming more common.

I recently read a story in Barron’s magazine about a woman who had no idea how to access many of her husband’s digital accounts after his unexpected death at age 52. She turned to IT forensic experts who helped her gain access, including her husband’s IRA. But after nearly three years, she still has not gained access to that cryptocurrency account.

Given how broad our digital footprints are, it’s increasingly important for people to provide passwords and other account information to their heirs, advisors, or estate lawyers long before access becomes an urgent necessity.

In years past, a trustee could get a reasonable picture of a deceased person’s finances simply by having their physical mail forwarded. But what used to be a pile of bills and brokerage statements is now largely paperless. Gaining access to these accounts can be extremely difficult for heirs if they do not have the proper information, as digital accounts are protected by a mix of strong passwords, encryption, multifactor authentication processes, fingerprint and facial recognition technology, and federal data privacy laws.

What to Do:

Create a list of digital accounts and instructions on how to gain access to them. This list should include not only financial assets, but social media and other accounts. Digital accounts that loved ones or advisors may need to access following a death include:

• Traditional financial accounts (bank accounts/retirement accounts/PayPal and Venmo accounts)

• Home payment and utilities accounts (mortgage, electricity, gas, cable, internet, home insurance)

• Health-related accounts (insurance, electronically stored medical records)

• Email accounts and domain names for websites

• Social media accounts (Facebook, Instagram)

• Smartphone accounts

• Storage and file-sharing accounts (Dropbox)

• Cryptocurrency wallets, Nonfungible token (NFT) assets

• Photo, music, and video accounts (YouTube, Shutterstock)

• E-commerce seller accounts (Amazon, Etsy, eBay)

• Subscriptions (streaming services such as Netflix and Hulu, newspapers, music services such as Spotify)

• Loyalty/rewards programs (airline miles, hotel credits, etc., that may be transferable to heirs) 

Heirs, advisors and executors with proper passwords and other information should face far fewer complications when it comes to actions, including canceling online subscriptions and accessing less-regulated financial accounts that could contain substantial sums, such as cryptocurrency wallets.

Keeping this written list at home is risky. A safe deposit box or secure source outside the home are better options. Passwords should not be included in a will itself, as the document is part of the public record in probate.

At Carlton & Co. Financial, you have access to a secure client portal where you may create private folders that can house this very type of information. If you have questions on how to set that up, please contact me.