Password Management: A Key Element of Estate Planning

At a local fitness club, members were invited at the beginning of January to post their new year’s resolutions on the large bulletin board in the central lobby. One woman, a member of a senior aerobics group, wrote that she was determined to organize her passwords. That would be no small achievement because the average person now has about 80 passwords, and the number continues to grow. Nearly everyone at some point has forgotten a password and needed a reset.

To follow through on her resolution, this woman might try a password management system. It would guide her in organizing passwords by category, and it would help her select passwords that would be difficult to crack. At the very least, she should list her passwords and delete those she no longer uses.

She should also make her password information accessible to a trusted individual who will serve as a fiduciary or administrator of her estate. Passwords may be necessary to access financial accounts, pay bills, use a telephone, open a computer, maintain memberships, check medical records, participate in social media, and for numerous other purposes. Without knowledge of sites where information can be found and a portal to those sites, it is extremely difficult for someone to fulfill duties if given a power of attorney or named as executor of an estate.

The woman at the fitness club was taking an important first step when resolving to organize her passwords. However, chances are that other elements of her estate need to be reviewed and organized as well. How recently has she updated her will or living trust? Have there been births, deaths, or changes of fortune in her family? Does she need to change any of her beneficiary forms? Has she integrated what passes to others by will or living trust with what passes by beneficiary designation? Has she considered the possibility of a charitable legacy gift? Addressing such questions has always been part of estate planning, but now we must add provisions for digital property.

It took courage for this woman to post her resolution on a public bulletin board — it means she is serious and is more likely to fulfill her intention. Still, she may want to add to her resolution: “To organize my estate beginning with my passwords.”

Learn more

Find gift-planning articles and advice.