But if you were become incapacitated or die, would the agent you’ve chosen in a durable power of attorney or your executor be able to access your online accounts to manage your financial affairs? If they don’t have access to your username and passwords, the answer is probably “no.”
As we handle more and more of our finances online, it is important that we organize our account information and passwords so that they can be easily accessed when needed. Attorney and journalist, Debora L. Jacobs, recently wrote an article about the best ways to securely store the keys to your online financial life. Below are her suggestions:
1. Use an electronic password manager. An electronic password manager, like LastPass, is a service that generates passwords, encrypts them and stores them securely. To access your passwords, all you have to do login to your electronic password manager account. Instead of remembering all your passwords, it will only be necessary to remember one.
2. Rely on a digital gatekeeper. Several new companies have begun offering a means of organizing your digital life so that important details such as passwords for protected accounts can be accessed by your loved ones when it becomes necessary. I wrote about some of them last year in my article Estate Planning for Your Digital Estate.
3. Put it in a cloud. Online storage services, such as SugarSync and Box, charge a monthly fee to store your documents online. You can store a list of your passwords, which you can retrieve from anywhere and at any time. All that you, your agent or your executor would need to access your list is the username and password to your storage service account. Because you will be storing sensitive information on the site, it is important that you verify that the service you use is secure.
4. Back up onto a USB flash drive. You can import document with a list of your passwords onto a USB flash drive. It is important that you keep the document on the flash drive updated when you add an account or change a password, and keep the flash drive in a secure location. I would suggest keeping it with your estate planning documents in a fireproof safe in your home.
5. Enter vital information in a looseleaf or notebook. If you don’t want to create your own notebook, Deborah Jacobs recommends The Beneficiary Book , which is available here as a print edition for $29.95 or an interactive e-book for $19.95. In the alternative, you can download my free personal records organizer by clicking here.
6. Use an old-fashioned lock box. In addition to using some of the other methods mentioned above, you can keep a list of your accounts and passwords, a flash drive, or information related to your electronic password manager, online storage service or digital gatekeeper in a fireproof box in your home or in a safe deposit box at a bank.
Regardless of how you choose to store your usernames and passwords, all your efforts will be worthless if your loved ones don’t know where to find them. So make sure to tell them how to access your online accounts and continue to remind them over the years.