Probate and Passwords

From Attorney Scott E. Squillace

We attempt to provide considerable information on our webpage (www.squillace-law.com) concerning probate and trust administration. We describe the process, court proceedings, etc. There are, however, some important practical issues that people run in to when probating an estate or settling a trust. These issues are not unique to Boston or Massachusetts. We would like to highlight some of these for you in this posting.

One of the challenges we see more and more has to do with electronic passwords. If you bank on-line, pay bills on-line, have automatic drafts, on-line savings account, or any other type of electronic payments, your executor and/or trustee could run into problems.

If the account is in the trust’s name, the successor trustee could step in and have automatic withdrawals stopped as long as the payments were made from the account. The challenge appears when the payments are set up through the credit card company or on an automatic withdraw. The only way to know there is a withdrawal is to wait and see if it happens. If it is not a trust account, your executor or successor trustee would have to wait months to access the account (assuming you were the sole owner).

While everyone is nervous about secrecy of passwords, and they should be, it does create a probate if you pass away unexpectedly.

Of course, before you embark on any suggestions contained in this posting you should consult with an estate planning attorney for the pros and cons of each suggestion.

To help alleviate the problem created by electronic passwords, you could:

1. Put the cash account into the name of your trust- could be a hassle, but a successor trustee can step in immediately. May require you to close the account and open a new one.

2. Keep a password list in safe place- let your loved ones know you have a password list and that it is stored in safe place. You could store it in a home safe (assuming someone else has the code to get in) or a safety deposit box (again, hoping that someone else’s name is on the box to have access after passing). Or, better yet – give a copy to your estate planning attorney for them to keep in your file at a safe location in their office and be sure to keep it UPDATED when you update your estate plans annually.

If you need help with a probate matter, estate planning, or family business, please do not hesitate to contact us at (617) 716-0300 or info@squillace-law.com.