Technological Advances Create New Obstacles for Personal Representatives
November 11, 2009
Sarah S. Butters- Tallahassee
Due to technological advances, many people now receive and pay nearly all of their bills online. While paperless billing is efficient and eco-friendly, it can unduly complicate the administration of an estate. Online bill payments often leave no paper trail behind to assist a deceased person’s family or executor in identifying their assets or liabilities. For obvious security reasons, many individuals do not keep a list of their online accounts, pass codes, or even access information to their email addresses where statements are often received. As a result, the task of locating assets and liabilities becomes even more complex and time consuming for the loved ones who are left behind.
Online Accounts – Hard to Research
Nearly every state’s probate code requires that some effort be made by an executor to identify the creditors of a decedent and satisfy his or her just debts. Accordingly, it is important to provide someone with access to your online information, including security accounts, bank accounts, credit card statements and email accounts. In addition, it is important to note deposits that are automatically made to your accounts and bills that are automatically debited from your accounts each month. If no one else has this information, how will your executor identify your creditors and verify the amount due to them after your death?
Typically, a probate attorney will advise an executor to collect several months worth of a deceased person’s mail to determine what bills might be due in a typical monthly billing cycle. This task would prove fruitless, however, if the decedent subscribed to paperless billing. Similarly, probate attorneys often advise an executor to go through the decedent’s checkbook in an effort to identify the decedent’s creditors. Today, however, those techniques would likely provide little information because nearly every financial institution not only provides, but encourages, online bill paying, rendering a checkbook nearly obsolete.
Paperless Transactions – Another New Challenge
To further complicate matters, many people have opted out of receiving hard copies of statements for securities and bank accounts, and instead do all of their banking online or receive electronic monthly account statements. As a result, family members are often left without any access to information regarding a decedent’s assets and liabilities. To assist your loved ones and executor in identifying your assets and liabilities, it is a good idea to keep a current list of all online account information, including the following:
- bank and brokerage accounts: detail their web addresses, your log-in and pass code
- email accounts: list all personal email addresses where you might be receiving monthly statements or other financial information
- creditor information, including any bills automatically debited from your account and/or those that you customarily pay online through an online bill pay program
- any creditors that are paid via direct billing to a credit card; for example, utilities, newspaper subscriptions, commuter passes, etc.
What you do with this list, however, may be a difficult decision. For security reasons, you may not want a written document with all your security information lying around in your home or office. Additionally, many people do not want to provide even their most trusted loved ones with a written list of critical passwords and access information until it becomes absolutely necessary.
Virtual Safe Deposit Boxes – An Online Option
In an effort to provide some solution to this growing problem, a number of online companies now offer a way to manage online information in the form of a “virtual safe deposit box.” For a fee, companies like iGoodbye.com and LegacyLocker.com will hold in escrow all of your login names, passwords and other electronic data until the person you have designated retrieves this information in accordance with the terms you have established. Typically, this would require that the designated person produce his or her own driver’s license along with sufficient evidence of your death, before any stored information is released.
Similar companies like safedepositbox.com, FireDrive Inc. and E-Safe also provide secure, online storage of documents and information. For example, an individual can store digital copies of documents related to their assets, investments, prior year tax returns and insurance policies. Other helpful information that can be uploaded for storage (in case the originals of these documents are lost, destroyed or could not otherwise be located after death), might include copies of life insurance beneficiary designation forms, a last will and testament, deeds and mortgages.
Prices for these services range anywhere from $9.99 to as much as $80 per year. Some companies even offer a one-time, lifetime fee, at a cost of about $300. While some may feel these costs are high, often they are only a fraction of the cost that might be spent trying to piece this information together after one’s death. As these types of services become more commonplace and time-tested, it will become easier to separate those that can be expected to be around for the long term from unsuccessful start-up operations. And, as is the case with other estate planning tools, leaving your affairs in an organized manner allows your loved ones to mourn without the added stress of trying to identify what assets you have and what bills need to be paid.
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