Despite cyber security experts warning against writing down passwords, the Financial Times (9th June 2020) didn't just tell us to write them down - but suggested we share them to our family.

But should you keep a note of passwords?

One thing we can be certain of is that everyone dies. If when you die your Executor does not locate all of your assets (like online ISAs or share accounts or policies), then there is a good chance your money will not go to your family.

According to government figures, a whopping £18 billion is estimated to have been lost in unclaimed estates simply because the Executor did not find the deceased’s assets.

It is not uncommon for family members to have to search through a loved one’s home and a mass of paperwork in a bid to find the relevant details. This is obviously not a failsafe approach, especially with the rise of paperless banking where information is sitting behind password-protected systems and in emails.

But while it is important your assets can be accessed, writing down passwords is a bad idea. Here’s why:

  1. Executors or administrators are responsible for an estate, its assets and for obtaining a Grant of Probate before distributing the estate. They only need to know the account details, not the log-in.
  2. Giving an executor or administrator log-in details puts them at personal risk because they can easily access someone else’s accounts and it leaves them open to accusations if something goes wrong.
  3. The risk of fraud, loss or simple process failure is just far too high.

Given password information is not needed by Executors, they could be in a difficult legal position if they did log in (which isn’t certain given other security features), and all whilst exposing you to the above threats, we would argue not.

But the Financial Times is right and raise a very valid point that your Executors need to know how to locate your assets. Writing a list and giving it to your trusted family is one way.

What are the alternatives?

There are many online services that allow people to share information, from file-sharing services to simple emails. In many cases online services take security seriously, and information can be filed for when it is needed.

There are some password management services that allow ‘3rd party’ access to information, and this could be combined with file sharing to effectively transfer a log of asset information when needed.

But combining multiple tools is not fail-safe. Information needs to be updated when changes happen, and the relevant people reminded about the process, because all the effort will be wasted if the process does not work when needed.

To provide a service that is fully integrated to your Will and other planning, kinherit provide a complementary registrar of assets, through our kinvault™, a hyper-secure online storage system.

It comes with a personalised handover service. So the right information goes to the right people at the right time. What this means is that we speak with your appointed executor and inform them of their role and duty – while you are alive.

Kinherit even let you link in your financial advisor or other key people. The support this gives to your Executor is substantial, designed to make their role is simpler, and provide greater peace of mind for all concerned.

This is all so that, when the time comes, your family get the experience that you would want them to have. Perhaps, that is the number 1 consideration when thinking about what you want to leave behind.