Documenting your assets; online or paper?

The single most challenging job for an Executor of a Last Will and Testament is to gather up the estate. The estate is made up of land or buildings, financial accounts and policies, “chattels” (stuff that you own), and now, increasingly online accounts. If the list of assets is not written down or stored anywhere it is an impossible task, and the Executor has no way of knowing when the task is completed. As a result, the BBC reports that there is £15B in dormant bank accounts, The Bank of Canada have posted that they are currently looking after 1.3 Million unclaimed bank accounts waiting for a claim. And in the US, CNN reports that there is $58B in unclaimed assets sitting in State treasuries.

Each jurisdiction has its own way of dealing with these accounts; Canada probably has the most straightforward search through the Bank of Canada, the UK has a service called MyLostAccount set up by the British Bankers Association (but it’s a tedious service to work with) and the US has allowed free enterprise to encourage a variety of different services, headed by the non-profit National Association of Unclaimed Property Administrators, with a service at unclaimed.org which allows you to search through different State treasuries.

Most of these unclaimed accounts are for people who have passed away, when the Executor knew nothing about them. The administration of the estate was completed without knowledge of those accounts, and the assets entered into an eternal limbo until the government claims them as their own. Given how widespread the issue is, and the billions of dollars at stake, what can be done to ensure that all of your assets reach your beneficiaries? There are, at a high level, two options;

Writing everything down on a piece of paper
The first point to note with this option is that under no circumstances should you describe details of all of your accounts in your Will. It would mean having to update your Will every time an asset changes including signing and witnessing the document, but more importantly, once probated, your Will is a public document so everybody will be able to read this detail. There have already been reports of scammers scouring probate records for login credentials written into Wills. What we therefore mean is writing everything down on a piece of paper and storing it with your Will; you can do this either on an ad-hoc basis or through a structured book like My LifeLocker.

The key advantage of this approach is that it is personal and confidential; you are not relying on any third party to store the information, so it is guaranteed to be safe. The disadvantage is that in keeping the document safe, it may never be found. Paper is not particularly durable either, so it may get lost in a house fire, flood or other natural disaster.

Using an online service
The alternative is to use an online service that offers to store your account information and passwords for you, and then release them at the appropriate time. Let me deal with the obvious disadvantages of this method first. You are handing all of your personal and financial details over to a third party. If somebody came to your front door and offered to look after your passwords for you, there is not a chance that you would take them up on the offer, so why would a website be any different? Some of these services are offered through overseas companies and you would quite frankly be insane to trust them. The company also has to last longer than you, which is this rapid world of startup booms and busts is statistically not likely. In our 14 years of operation we have seen companies offering this type of service come and go, and on the Digital Beyond blog they recently wrote about 26 companies that offered to keep your credentials safe for your loved ones (for a monthly fee) that have subsequently disappeared; AssetLock, E-Z-Safe, EstateLogic, Eternity Message, Futuristk, GreatGoodbye, if i die.org, Legacy Organiser, Life Document Storage, LifeStory.com, Lifestrand, Memorial Gardens, MemoValley, MentoMori, My Last Email, My Web Will, and MyInternetData.

But there are advantages to using a service like this. At LegalWills.ca, USLegalWills.com and LegalWills.co.uk we have teamed up with My LifeLocker to guide people through the process of documenting all of their assets including their online accounts, and then have tied this together with our proprietary Keyholder mechanism. You name a trusted keyholder who is given a unique securely generated key. They can then unlock your document at the appropriate time after going through the required security measures. The information is encrypted so it means that the right information gets in the right hands at the right time, and cannot be compromised. It is also easy to update by logging into your own secure account, the same account that you used to prepare your Last Will and Testament, Living Will and Power of Attorney.

So if you are going to use an online service, look firstly for one with longevity. Look for the usual industry seals like Better Business Bureau accreditation or maybe check out Ripoff reports at www.ripoffreport.com. Look for companies that are based in your home country and then check to see the type of security that they have in place. The recent Heartbleed Bug awakened many people to the risks of online accounts (we weren’t affected). Finally look at the actual mechanism for releasing the data; how is it guarded against unauthorized access.

Our Lifelocker service actually has the best of both worlds; you can print it and store the document on your bookshelf, and also have an online version available to your keyholders. Or just choose the one approach that works for your situation.