Would you believe that there is over $58 Billion of unclaimed cash and benefits in the United States? The following article examines this phenomena in more detail.
How in the Wild Wild World of Sports can that happen? Quite often, unclaimed assets are the result of a surviving spouse, or heirs, having no knowledge of, or access to, information held in password protected accounts.
Imagine that you have a well drafted Will, Living Trust, and Durable Power of Attorney that carefully directs the management of your assets for the support of you and your spouse through a period of incapacity or your death. You have meticulously structured a plan for the education of your children and the distribution of your assets as your children achieve different stages of adulthood. You have preserved your family privacy through the Living Trust and have avoided the disruption of a potential probate proceeding. Well done – except for one thing – nobody can find your cheese. All of your accounts are online, and only you have the usernames and passwords.
When my mother and father in law passed together in an automobile accident in 1982, my wife and I were able to gather a lot of information about their assets, accounts, and obligations simply by checking their mail, sifting through a few desk drawers and file cabinets, and by opening their safe. My father-in-law was a serial entrepreneur with over 18 separate bank accounts. However, over the past 10 years, the landscape of record keeping, bill paying, and asset management has changed dramatically. Clients now use online services and cloud storage for virtually everything. In today’s world, checking one’s mail might only disclose an array of coupons and unsolicited correspondence.
Quite often, one spouse or the other, regardless of gender, is solely responsible for managing all of the family financial transactions. When I ask my clients this question, one spouse usually nods their head, acknowledging their role as gatekeeper, while the other spouse looks up and says, “I have no idea. He/she takes care of everything.” Take a moment to think about how many online accounts, logins, and passwords exist. Here is a list to get you started:
- Checking account(s)
- VISA, Mastercard, Discover, American Express account(s)
- One or more car payments
- Home mortgage payment
- PayPal, Venmo
- Streaming TV e.g. Netflix, Hulu, Philo, You Tube TV, Sling, AT&T TV, Showtime
- Online Shopping e.g. Amazon, Walmart, eBay, Etsy, Google Shopping, and thousands of specialty websites
- Retail Accounts e.g. Target, Nordstrom’s, Macy’s, Sears, Penny’s, Kohls, GAP, Lowes, Home Depot
- One or more IRA, 401(k), SEP, or other retirement accounts – Social Security Administration
- Investment or brokerage accounts e.g. Merrill Lynch, Mellon, Wells Fargo, Edward Jones, etc.
- Credit monitoring accounts e.g. Experian, Equifax, TransUnion
- One or more life insurance policies
- Health insurance
- Medical records and Doctor’s office portals
- Home, Auto, Personal Umbrella, and other insurance accounts, possibly with multiple companies
- Water, gas, electric, phone, TV/cable, Internet, and alarm company
- One or more student loans or tuition payments for children
- Social media accounts e.g. Facebook, LinkedIn, Twitter, Flickr, YouTube, Zoom, Instagram personal web site, blog
- One or more e-mail accounts e.g. Personal and Business
- Online newspapers and magazines e.g. Dallas Morning News, Wall Street Journal, New York Times
- Multiple travel accounts e.g. Airline Travel Miles, Hotels, Rental Cars, AARP, Airbnb,
- Quicken, QuickBooks, Turbo Tax or other accounting software
As you can see, there are a lot of accounts housed online that your survivor will need to access for any myriad of reasons. I recently read that the average person has 90 or more digital accounts and assets whose login information and whereabouts are known to only one spouse. My wife, Lisa, and I have over 140 accounts between us. The death or incapacity of the record keeping spouse would leave the other spouse and his/her family completely unaware and without access to key information or necessary liquidity. In other words, the cheese is there, but nobody can find it.
What about family photos that are stored online or on a computer hard drive that is password protected? Where are tax returns, deeds, and other important documents located?
As part of the peace of mind process, we suggest that our clients create a list of all digital assets, logins, and passwords, including passwords to computers, cell phones, and tablets. Keep in mind that at some point, a third person will need to know everything that you know and how to access it. Think about who that person would be, maybe a spouse, adult child, or trusted friend. Let them know your plans and where they can find this information upon your death or incapacity. The list can be password protected on your computer or thumb drive and the password stored in your estate planning documents.
Social media is a completely different discussion topic. There is a lot of information and litigation over privacy concerns involving Facebook, LinkedIn, Twitter and other accounts. Decide what access, if any, you wish for others to have to this historical information.
Inherent in any estate is the desire to make things easy on a surviving spouse, children, executor, trustee, or guardian. The perfect plan can be turned into a difficult maze to navigate if nobody can find your cheese.
©Will Morris 2020