Cheryl A. EllefsonBy Cheryl Ellefson, CPA, MBT, CFP®

We have so many passwords. You use one to get into your phone, another to log into your computer, and yet another to open your email inbox. Your bank accounts, shopping accounts, and social media accounts have…you guessed it, a password. Of course, passwords are necessary to keep our electronic information secure—to prevent it from falling into the hands of cybercriminals. But what happens when you die?

If you were to pass away without sharing your passwords with the executor of your will, it could make it difficult for this individual to carry out your wishes. Your family members and loved ones may also need to know your passwords, not only so they can shut down or lock your social media accounts but also to access treasured photographs and videos that may be stored in the cloud.

With this in mind, here are some best practices for storing and sharing your passwords.

Securely store all your passwords in once place

You can do this using a software application or a physical notebook. If you go the software route, know there are several applications designed to securely store your logins and passwords. Cyber Solutions, our subsidiary company, has found that LastPass or RoboForm works well for password and critical information management. There are several other features such as document storage, and sharing passwords with family – at a low cost – that make this tool a popular option. Of course, you’ll need a password to access these apps, but that’s all your executor or trusted loved one will need to access your logins and passwords.

If you list out your logins and passwords in a notebook, consider coding the passwords for an added layer of security. For instance, you might use “XXXX” in place of four digits. Also, be sure to store your notebook in a secure location. Let your executor or trusted loved one know your password coding system as well as where they can find the notebook. If you prefer to keep everything in one place, download our book When I’m Gone, which will help you organize all your information, including passwords.

Don’t forget your phone password

More and more financial-related websites are requiring two-factor authorization. This typically requires the user to confirm a login attempt via text message. Knowing this, it’s important to share your phone password with your executor or trusted loved one, too.

Provide written consent for your executor

Federal laws govern the unauthorized access of digital assets. However, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), enacted by many states, allows executors to access, copy, and manage certain digital assets. Without written consent, however, the executor may not be granted access under RUFADAA. This applies even if the executor is your spouse.

Authorize access via a letter

It’s also a good idea to draft a separate letter authorizing your executor or trusted loved one to access your passwords. Be sure to include directions for how to find your passwords and access your accounts. You can even divide account access privileges among various individuals. Your estate attorney can help you understand your options for this letter, too.

While you should keep the letter with other important documents such as your will, health care directive, power of attorney, and insurance information, don’t include it in your will. Your will is public information—your passwords are not.

Practice proper password management

Properly storing and managing your passwords can make things easier for your loved ones if you were to pass away. It can be tempting to put it off, but now is the time to make a plan. What’s more, some of these best practices will also make life easier for you!

If you have questions about getting started with your estate plan or would like a paper copy of the book “When I’m Gone”, we’re here to help. Contact us today.