Keeping the passwords to cryptocurrency wallets secret is a smart idea. If a password fell into the wrong hands, all the virtual cash could disappear. However, without the password, leaving all that cryptocurrency to a beneficiary might be a hollow gesture. The California probate process could become stressful and aggravating when heirs and beneficiaries lose access to digital accounts. For this reason, effectively organizing digital accounts must become a priority when estate planning.
Estate planning and the digital world
“Digital asset” is a term that covers a significant amount of territory. Cryptocurrency, online brokerage accounts, social media profiles, emails, and even photo and file storage methods fall under the digital asset heading. Without passwords or a way to retrieve passwords, an executor or a beneficiary won’t be able to access these accounts.
More importantly, no one will try to access the accounts if they don’t know the accounts exist. Compiling a list of various digital accounts should be the first step when working those assets into estate planning.
The list should include usernames, passwords and connected email addresses. In short, an executor or an authorized beneficiary should not have any impediments to accessing the accounts. Maybe a bill requires swift payment, or transferring money to a new account has to be done right away.
Executors and heirs are not the only ones who may require access to the list and passwords. Someone with power of attorney may find these accounts helpful. Effective planning could make things easier for everyone who has business with the accounts.
Preserving account safety and security
Putting the digital account and password information in a safe place requires some deliberate thought. Writing all the passwords down on paper and putting them inside a drawer isn’t the best plan. Saving them in the cloud as a document comes with risks of being hacked. Even an executor of the estate could have a hard time getting access to a safety deposit box.
Why not put the information into an attorney-client file? The attorney’s safe or safe deposit box could keep prying eyes out while affording authorized access to others when the appropriate time comes.