Years ago, people stored their most important documents in safes, fire proof cabinets, and safe deposit boxes. Now, almost all documents are stored electronically and paper documents are quickly becoming a thing of the past.
Almost everyone dreams of going paperless as paper takes up space and can be hard to find. In contrast, electronically stored documents can be accessed 24 hours per day, 365 days per year, as long as you have the correct user id and password.
Unfortunately, more often than not, user ids and passwords are not written down, much less shared with other individuals. As a result, it’s difficult (in some cases, almost impossible) to recover important electronically stored information – information that will be needed to properly administer a decedent’s estate.
For example, if the decedent had a Yahoo account, you’ll need to know the decedent’s user id and password to access any information from the account. Otherwise, you’ll be referred to Yahoo’s help page which reads as follows:
At the time of registration, all account holders agree to the Yahoo! Terms of Service (TOS). Pursuant to the TOS neither the Yahoo! Account nor any of the content therein are transferable, even when the account owner is deceased. As a result, Yahoo! cannot provide passwords or access to deceased users’ accounts, including account content such as email. Ultimately, it is our policy to honor the initial agreement made with our customers, even in the event of their passing.
All of us, therefore, need to keep a record of our user names and passwords for all of the accounts that we use. The list of user ids and password can be written down on paper. If this occurs, the paper should be stored in same place as your Will. Or, the list can be stored electronically. While the simplest method is to save your accounts and passwords in an electronic document, most technology experts recommend using something more secure. One solution is to save your passwords in an encrypted database using a tool like KeePass. You can setup the KeePass database on a flash drive to be kept with your Will. Just remember to routinely update the passwords in the database so that it stays current. Alternatively, there are online services where you can store your account information for a small monthly fee.
In addition, you should designate in your Will who your “digital fiduciary” will be (the digital fiduciary is the person that you designate to have access to your electronically stored data in the event of your death). Take a look at your Will and if you find that you haven’t designated a digital fiduciary, you should take the steps that are necessary to have your Will updated.
Almost all of my clients want the beneficiaries of their estate to have an easy time gaining access to their inheritance. Remember, in today’s day and age that can only occur if a digital fiduciary is furnished with the information needed to access your electronically stored data.
If you have any questions about federal estate taxes please contact Maurice Offit at:
ABOUT MAURICE OFFIT
email@example.com | 301.575.0308 Maurice Offit is an estate planning attorney, co-founder of Offit Kurman Attorneys at Law and a member of the firm’s Management Committee. Mr. Offit counsels a large number of clients who share an interest in minimizing estate taxes and asset protection from the claims of creditors. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.