Passwords: Where to Keep Them

Protected access to your online account passwords is vital for a smooth estate settlement process.

Posted on May 13, 2021 by ClearEstate
Man holding phone with a secure password

With the explosive growth of the internet, digital accounts, and digital record-keeping, estate planning has had to play catch-up. Estate planning professionals and estate executors must now deal with digital assets in addition to physical property and other traditional estate items. Protected access to your online account passwords is vital for a smooth estate settlement process. Here are some ways to store your passwords, so they'll be accessible when needed.

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Where to Store Digital Account Passwords

You have some options for storing your passwords. An old-school method is to write them all down or type them up in a text document and then print it out. Of course, you want to safeguard this sensitive information. So, you should keep this list in a locked safe at home or a safety deposit box at your bank.

Note that the hard copy method of password storage will be time-consuming and hard to keep up with. You'll need to physically add to or delete from your list whenever you make changes. If you keep the list in a safety deposit box, frequent trips to the bank will quickly become a bothersome task. Even with onsite storage, you're likely to forget to make the updates in a timely manner.

An improvement on paper storage is a USB drive. These data drives are inexpensive, portable and simple to use. However, security can be a problem. While it's easy to add password protection to your flash drive or encrypt your files, you run the risk of losing your drive, forgetting your login, and being hacked. Plus, regularly updating your drive can be hit or miss.

The most efficient way to store all your passwords is through a password management app. This software creates more secure passwords, lets you store them in the cloud, on your computer, or on a mobile electronic device. Multiple options are best. The platform stores all your passwords and you only have to remember one master login to get into your vault.

You have several choices. So be sure the password manager you use has aggressive security measures - like end-to-end encryption, random password generation, and automatic update features. Look for zero-knowledge architecture, which means the provider cannot access your passwords.

Why Password Storage is Important

A NordPass study estimated that most people have about 70 to 80 passwords. Unless you have a photographic memory, you need a way to store all those login keys. A password storage method simplifies life and helps you get into your accounts when you forget how.

Password storage is important when you're gone, too. Even more so, because you're no longer here to gain access through an ID verification process. Online accounts and digital assets are part of your estate. Hence, they need to be part of your will and overall estate plan. But since all of these assets are password protected, access is vital during the estate settlement process.

One of the many important duties of an estate executor is asset gathering. Giving your executor a single point of access to all of your passwords after your death simplifies a difficult job. It also helps your spouse or children take care of essential tasks when you're no longer here to do it. They can log in to access funds, pay bills, and keep the household running smoothly while they're dealing with grief. ClearEstate helps your executor manage the estate settlement process with skill and empathy.