In prior newsletters, we have written extensively explaining the [many] reasons why it is advisable for both you and your loved ones to plan in advance for some of life’s more unpleasant contingencies, (disability, incapacity and death-which is more than a contingency for all of us) by executing at least three separate “estate planning documents”, comprised of a Will, Advance Health Care Directive/Medical Power of Attorney and Financial Power of Attorney. While these documents do not help any of us to AVOID these unpleasant situations, they do help us and our families to better navigate and cope with them at a time of crisis-especially if the documents are prepared by an attorney who can guide and advise you, based upon your individual and family specific circumstances.
But irrespective whether or not you take the advice offered about the estate planning documents, there is still something that each of you can do and should do (and the sooner, the better) to prepare for the unexpected. Best of all, you can do it yourself and wholly without the advice or assistance of counsel, your accountant and/or your financial planner/adviser.
Visualize this scenario. First, prepare a list of every account/program (bank, investment, utility, credit cards, debit cards, medical portals, electronic devices, including cell phones, tablets, PC’s, laptops, professional associations and the list goes on and on) belonging to you (individually or jointly) that require passwords, pins and/or answers to specific security questions to gain access. Next, think how often you are REQUIRED to change each one of these items (many times the institution/provider requires these security access codes to be changed at least quarterly). Third, try to recall if YOU (who created each of these items) have historically been capable of recalling each and every password, pin, and security question without checking or referring to wherever or however you store the information. I bet the answer to that question is a resounding, “NO?! (I know, I cannot).
Now, fast forward to the future. Envision that chaos that would ensue if you suddenly died or became disabled/incapacitated and had failed to provide any of this account access information- prior to your death/disability-(and had failed to even advise anyone how and where to FIND this information) to any family member, friend or trusted professional advisor? The likelihood is high that this person(s), suddenly thrust by circumstances beyond anyone’s control into needing ready access to these accounts, will be denied access because they lack the information necessary to gain access. What an unfortunate (yet totally avoidable) dilemma?!
Luckily, however, it is a dilemma easily avoided, if you are proactive before catastrophe occurs. Start by preparing a sequentially numbered list (electronic or hard copy) of each and every one of your accounts, of all types/nature, that require passwords, pins and/or answers to specific security questions.Keep that list as “List #1”. Then create another list (“List #2”) by addingto the prior list the passwords, pins, and answers to security questions for each account, but deleting the account specific information. The access codes/pins/passwords should align with the corresponding number of the account identified on List #1. Place a tickler or reminder on your calendar (hard copy or electronic) to review and update the Lists on a periodic basis of your choosing, but not less frequently than quarterly to prevent the information from becoming overly stale.
The more difficult questions become: “where do I store the information so that it is safe” and “how do I get the information to the person(s) who need it, when they need it, in the event of my untimely death or incapacity/disability”?.
These are very personal questions to answer and are largely dependent upon your relationships and the levels of trust you have with the people most likely to step up in the event of an emergency (spouse, children, parents, siblings, friends, trusted professional, others?)Only you can answer the question of “who”.
List #1 showing only the account information, but excluding the access information, can be stored somewhere more readily accessible, and you can share that location with others, whom you trust. But recall, if you store List #1 on your computer and your computer is password protected, those trusted individuals will still need to at least be provided that one access password to get to List #1. You may want to make that access a word that has special meaning to your and the person most likely to be needing it, that would not need to be written (such as your favorite color or food, exotic location you would like to visit and the like). Avoid birthdays and anniversaries that can possibly be publicly accessed. There are also portable password vaults or safes (but again the initial access password must be known to the person who will most likely need it). The same process for access to a portable vault can be used as for the List #1 stored on the computer.
If List #1 is hard copy, it may be wise for the 2nd List (“List #2”) to be held by a different person (who would have only the passwords/pins and security questions, but without the identifying account information). The passwords, pins, security question would correlate to the number for the account onList #1, but the identifying information about the account would be lacking. In this fashion, neither person has all of the information needed to access the accounts. Only together would have all of the information needed to gain access to your accounts. Again, TRUST remains a huge consideration in all of this planning.
Finally, if you store List #2 on the computer, there are apps that can be purchased that are essentially encrypted password vaults/wallets for passwords (how these apps work is well beyond this author’s skillset).
The main purpose of this article is not so much a “how to guide”, but rather is intended to sensitize the reader tothe need to mobilize NOW to develop a plan for the contingencies that can occur without notice and which can cause undue hardship for those left responsible. Each plan developed will be driven by the relationships among the parties and the levels of trust. There is no “one size fits all” solution, but with proper planning, there is a solution for everyone.
