Estate Planning and Cloud Files: When Going Paperless Means Going Without Knowing

How many times in a given day are we asked to ‘go paperless’ for our most important transactions, with our bank and financial institution monthly or quarterly statement.  Several months ago I opened a probate estate account for a client family. When the first month’s bank statements arrived, there was a “Paper Statement Fee” of $3.00 added to the debit column.  Another client of mine who is not computer savvy requested a year’s copy of her guardian’s account bank statements and canceled checks for which she was charged $50.00. Most people today, young and old, handle their finances online. We access our broker and bank accounts online. We keep track of our 401Ks and employment retirement accounts online. Social Security has stopped sending out work history statements. We schedule payment for our credit card and utility bills online.  We file tax returns online.

Virtual financing and cloud storage has brought about a major shift in estate planning and family finances. This shift has its good and bad points. Thank goodness we are saving trees.  But where have all the passwords gone?  It’s not unusual for one spouse or partner to be handling the major finances and for that spouse to be in control of those finances.  Marriage does not offer the privilege of accessing a spouse’s password protected account.  This includes accounts containing assets—and debts–to which the other spouse is entitled.

This is not concerning access to your partner’s email account to learn about an affair. Nor does it pertain to finding out about her cell phone contact list. Read more about it in Elinor Mills CNET News article, Taking Passwords to the Grave.

And so here is a piece of major advice: Make it your business to know. In a marriage or partnership, each person deserves to know where he and she stand financially together at any time. Withholding financial information and preventing access to accounts undermines relationships. It diminishes trust. This can lead to financial abuse. Imagine yourselves alone, either widowed or separated and divorced. Try to imagine where you would begin financially as a newly single person. If there is no next, clear and affordable way out, then make a change. Determine to educate yourself on your family finances. Teach yourself the skills of online financing, and get those passwords. Do an annual review of the family finances. Tax preparation time is a good time to build this into the schedule keeping in mind that estate planning reflects changes in the market and passwords can be updated.