The handling of estates and uncovering a person’s assets is becoming more difficult with the advent of digital assets. This is becoming a complex issue in handling the assets of a decedent, stroke victim, or someone who suffers from a mental disability. In the “old days”, we would merely look through the mail to obtain the monthly statements from financial institutions. Now with people increasingly opting out of paper statements and going “paperless” it is much more burdensome to accumulate information. If all a person’s assets are available only through websites, some or all of those assets may go unfound, if an executor does not know where to look. Even if the executor does know of assets, the lack of user names and passwords will prevent access. Complicating matters further, many services require/encourage a change of passwords on a regular basis. So even if a disclosure of passwords is made, it will need to be amended over time. If the decedent used a “biometric” password, aka a fingerprint, that will make it impossible to access those accounts.
The “Catch 22” is all the experts tell you not to write down your passwords and certainly do not disclose them. On the other hand, disclosure of those assets and passwords will be necessary to access those assets after a death or disability. In addition to financial institutions, there are other “assets” located only online, i.e. PayPal, business or personal websites, bitcoins, YouTube accounts, Face Book accounts, Amazon and countless others. It is difficult to even notify these companies that a person has died and to close the account. I routinely see profiles on Facebook and LinkedIn of persons who died years ago. There are also conflicting State and Federal Laws about who will have access in the event of death or disability.
There are a number of proposed legislative acts to address this issue floating around, but not much has been enacted yet. If you want your assets to be found it is going to require some trust. You can give a full list of your accounts and passwords to a family member, trusted friend, or attorney. Most people will not likely do this. If nothing else, provide a list of assets giving the person who will be caring for you someplace to start. For example: I bank at First National Bank, I have a PayPal and ITunes Account, my retirement account is with Billy Bob’s Brokerage services and I have a number of US Savings bonds (which are online now – no paper bonds are now being issued). If you fail to even make a simple disclosure, your digital assets may not be discovered and will then be dumped in some “unclaimed funds” depository instead of going to your heirs.