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Passwords: The Secret Key To A Great Estate Plan

Key to a great estate plan
Safe and shareable password storage is vital in today’s computerized world. The old solution–writing down passwords on paper set next to your keyboard–is not safe, not adequate and not shareable.

While parents are alive and well is the time to prepare for the future, when they begin to decline. An adult child who is a primary agent and also executor has questions about organizing documents and managing storage in a digital format, as well as how to secure their passwords for online websites. The advice from the article “Safe sharing of passwords and legal documents” from my San Antonio is that these two issues are evolving and the best answers today may be different as time passes.  Password sharing can become the key to a great estate plan.

Safe and shareable password storage is a part of today’s online life. However, passwords used to access bank and investment accounts, file storage platforms, emails, online retailers and thousands of other tools used on a desktop are increasingly required to be strong and complex and are difficult to remember. In some cases, facial recognition is used instead of a password.

Many rely on their internet browsers, like Chrome, Safari, etc., to remember passwords. This leaves accounts vulnerable, as many of these and other browsers have been hacked.

The best password solutions are stand-alone password managers. They offer the option of sharing the passwords with others, so parents would provide their executor with access to their list. However, there are also new laws regarding digital assets, so check with your estate planning attorney. You may need to create directives for your accounts that specify who you want to have access to the accounts and the data that they contain.

Storage of legal documents is a separate concern from password-sharing. Shared legal documents need to be private, reasonably priced and secure.

Some password managers include document storage as part of the account. The documents can be uploaded in an encrypted format that can be accessed by a person, who is assigned by the account owner.  This is the easiest way to use passwords as the key to a great estate plan.

Document vault websites are also available. You will have to be extremely careful about selecting which one to use. Some of the websites resell data, which is not why you are storing documents with them. One company claims to offer a “universal advance digital directive,” which they say can provide digital access worldwide to documents, including an emergency, critical and advance care plan.

The problem? This company is located in a state that does not permit the creation of a legally binding advance directive, unless it is in writing, includes state-specific provisions and is signed in front of either two qualified witnesses or a notary.

Talk with your estate planning attorney about securing estate planning documents and how to protect digital assets. Their knowledge of the laws in your state will provide the family with the proper protection now and in the future.  Passwords may be the key to a great estate plan, but they will only work with the proper documents as the foundation.

Reference: my San Antonio (October 14, 2019) “Safe sharing of passwords and legal documents”

 

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