In the not-so-distant past, it was relatively easy for the loved ones of a deceased person to retrieve vital information from a “letter of instructions” held by an attorney. But technology has complicated the process. In fact, certain computerized data may be off-limits to anyone else if it is protected by a secret password. It may be difficult, if not impossible, to obtain the password from the administrators of a secure location even if you can prove that you are related to the decedent.
One possible solution is to include a list of websites and passwords in the letter of instructions. A similar approach is to provide a separate listing of the passwords to one or more individuals whom you trust implicitly. It may take you about 15 minutes to a half an hour, or perhaps even longer, to collect all the required information and to record it.
A simpler version of this protection is to write down the names of websites and passwords on paper and keep it somewhere near your main computer. Then you can let family members know where to locate the information. But it usually does not make sense to store the password list in a safe deposit box, especially because passwords may be changed often.
The online account information might also be collected by a personal financial planner. The planner can store the sensitive data in a secure electronic vault. Obviously, you would pursue this possibility only if you have developed a strong relationship with a particular planner.
Alternatively, there are several firms that can provide “digital” estate-planning services. If you opt to use one of these firms, make sure that it requires a secure connection. Caveat: Critics contend that the risks of using an outside service outweigh the benefits. In effect, you are releasing the sensitive information to a multitude of people, and it may be accessed through illegal hacking.
What happens if someone dies suddenly? The rules for accessing the content on a site vary widely. For example, Yahoo users have agreed to a “nontransferability clause.” If representatives of a deceased person contact Yahoo, it may close the account. Facebook makes its accounts private so that only confirmed friends can see the profile, leaving a space for users to leave posts in memory, but prohibiting anyone else from logging in to that account. In contrast, Google may permit an authorized representative of a deceased user to access that person’s e-mail, although proof of death is required. Twitter may grant an executor an archive of public tweets.
Undoubtedly, there are risks associated with creating a password list, no matter what avenue you take. Seek guidance from your professional advisers.