Passing Off Your Passwords When You Pass On

Estate planning in the digital age

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Online banking, cloud-based family photos, automated electronic payments: all convenient benefits of the digital age. For the users. Less so for their heirs.

“The way we used technology during life to make our lives easier can actually complicate how we wrap up a person’s financial affairs after death,” says Anne Coventry, an estate planning attorney with Pasternak & Fidis in Bethesda.

Technology has dramatically changed the practice of estate law in recent years. Historically, Coventry says, the executor of an estate would notify the postal service to forward the deceased’s mail. “You’d start to build a picture of what the deceased owned and what were his debts, and how do we administer the estate to make sure that creditors get paid and that the assets can all be gathered and distributed properly,” she says.  

That model is rapidly changing. “People don’t get their bills and bank statements by mail any more. They do them online,” Coventry says. “It’s possible for people to be completely lost trying to administer your will if you had automatic recurring payments coming out of a checking account that need to be shut off, but [no one knows] where the checking account is, because your statements come online.”

Simply giving loved ones a list of your log-in credentials to use post-death may technically be illegal. Those lengthy agreements that people seldom read before clicking “accept” typically include a prohibition against sharing passwords. Coventry urges clients to specify in their wills who should have access, and to what.

Even specific wording is not always a guarantee of easy access for an executor. “It’s very frustrating to try to deal with the internet companies on issues like that, because they’re not really set up to do customer service in that way,” says Coventry. “You have startup companies that are created by young people who think that they’re immortal and haven’t thought, ‘What happens when my customers die?’” 

A few internet companies have come up with their own solutions. Facebook allows users to designate a Legacy Contact, which gives one Facebook friend limited access after the user’s death or incapacitation. That friend can shut down the account, get a copy of everything posted, or turn it into a memorial page. Google has a feature called Inactive Account Manager, which allows users to assign access to all Google accounts if they’ve been silent for a specified period of time.

Coventry helped devise a more permanent solution: the Revised Uniform Fiduciary Access to Digital Assets Act. The legislation passed in 2016, and gives internet users the right to grant access to their accounts after they die or become incapacitated. Many other states are rapidly adopting it. The revised version requires an opt-in by the user—either through instructions in a will or via online tools.

“If this law is enacted widely, it’s going to become easier for internet companies to simply create an online tool than it is for them to have to go and read people’s wills,” she says. However, she recommends that her clients also include wording in their wills. Under the act, if instructions in a will conflict with those left via online tools, the latter are the ones that count.

Maryland

Coventry helped devise a more permanent solution: the Revised Uniform Fiduciary Access to Digital Assets Act. The legislation passed in 2016, and gives internet users the right to grant access to their accounts after they die or become incapacitated. Many other states are rapidly adopting it.

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