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The Wall Street Journal (subscription required) has a valid point in explaining the under-anticipated downside of going paperless. Once you’re gone, your family may not know where to begin to look for your accounts, assets, insurance policies, retirement plans, etc. So you should write all that information down and keep it in a safe place, right?
Well, not exactly. Having a list of your passwords and private information all in one place is asking for trouble.
According to the article, there are five key aspects to think about: information about your assets, names of advisers, details about safe-deposit boxes, your estate-planning documents, and a few other important documents. While that’s a nice arbitrary list of things to consider, it seems like a general rule of thumb should be to consider anything you’d want your loved ones to know about that you don’t necessarily want accessible to anyone else.
If you do centralize all your account information, write down only account numbers, key people to contact (lawyers or accountants, for example), and perhaps an inventory of important assets. But never write down passwords and/or any type of access codes. And even when writing your information without passwords, you probably still don’t want to store it on your computer. It’d be best to keep it on paper somewhere you can tell your loved ones to look.
And about those passwords… Your loved ones shouldn’t need them in most cases. If you designate your beneficiaries properly, they should be able to gain access to your accounts by showing a copy of a death certificate and proof that they are the beneficiary.
Whatever the case, if you go completely paperless, you’ve a) stored this kind of information on your computer or b) kept in your head. One option creates a headache for your heirs while the other is indirectly asking for your information to be stolen.
Interesting how new technology can also cause new problems…