I have had several cases over the last year where the decedent passed away and the family has no idea what assets she left behind (i.e., how much money is in bank accounts, what does she owe on the mortgage, etc.) because the decedent handled all banking or bill pay online.
Why does this matter? Well, if you call the bank after a loved one passes and tell them the person has died, the bank will, in many cases, freeze the accounts and they will not give anyone information about the account, unless that person is joint on the account or is listed as a “Pay on Death” beneficiary of the account.
If there is no joint owner on the account or a beneficiary of the account, then a probate must be opened. This is a court proceeding where family members ask the court to appoint someone as a personal representative to administer the estate (which includes paying the creditors and distributing the assets to beneficiaries).
However, what if the decedent only has $1,000 in his bank account? And what if his mortgage (which he set up to pay online) is upside down and that is the only asset in the estate? Without bank statements and access to online information, the family may be forced to open a probate in order to find out what assets the decedent owned only to find out that it was not worth the hassle.
So, what are the alternatives? It is important to maintain your passwords somewhere that they can be accessed after your death. For instance, passwords can be written down, stored on a flash drive or computer, or maintained through an online company that will notify loved ones of your passwords after you have passed. I’ve reviewed some of these companies in previous blog posts.
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What about your social media accounts such as Facebook, Twitter, Instagram and the like? These companies are very particular about what information they will give out to loved ones. Do you want your family to have these passwords to access the accounts? If so, you need to make sure your passwords are in a secure location that is accessible to your loved ones after your death. You may also want to consider asking your attorney to incorporate your digital assets into your estate plan such as assigning such property to your trust so that your trustee has authority over these assets if you become incapacitated or die. You may also want to consider adding a provision in your durable power of attorney which would allow your agent to have access to said accounts and maintain said accounts.