What happens to your passwords when you die?
Mary James
Georgy Timoshin // Shutterstock
You already know that having a will is important. Personal assets like homes, cars, jewelry, and other material items need a place to go after you die.
But what about your digital assets?
Phone and computer passwords, crypto wallets, investment portfolios, mobile banking passwords, and even social media credentials also need to be stored somewhere after you die. In many cases, these accounts may even be more important than some physical assets, and unless you use a password manager, these important details are likely scattered across multiple devices, in your brain, or even on handwritten notes around your home.
But how many people actually have a plan for their digital assets?
Our team at All About Cookies surveyed 1,000 American adults on this topic and found out how willing Americans are to pass on their digital legacy, how many people have even considered doing so, and even how many assets Americans are leaving unprotected in a worst-case scenario.
Key findings
- 67% of Internet users surveyed have a plan to pass on login or password information for their bank accounts in the event of their death, although not necessarily in a formal will.
- Of the 65% of people who had a will, only 24% said it included online account information.
- Only 30 percent of people surveyed in a relationship say that their partner would be able to easily access their online accounts in the event of their death.
- 50% of married people have money in online accounts that their spouse doesn’t know about. The median value of these accounts is $8,000.
Which digital assets do Internet users take precautions for?
Almost everyone understands the need to determine where one’s belongings go after death. Social media has been around long enough that we know how to archive a page after a person dies, but how many people have accounted for other tech assets?
Our research shows that about one in three of the participants surveyed have no plans at all.
Gaps in the protection of digital assets remain
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Bank accounts and apps top the list, with 67% of respondents taking precautions to share these. Considering most adults understand the importance of secure online banking while using their accounts, this still means one in three respondents keep their financial information private.
57% of respondents planned to share login information for bills or utilities. This is especially important for couples or people sharing a shared living space, who would have to deal with red tape just to make sure the power stays on or they don’t get locked out of Wi-Fi, while also having to deal with losing data. For those who live under the same roof, some family password managers allow for multiple logins that share access to important details in case the primary account holder can’t access the information they need.
The number of personal websites and business accounts was also low: only 35% and 31% of respondents, respectively, had made plans for these assets. Blogs and merchant websites have the potential to generate a lot of revenue and should be treated like a physical business.
Finally, digital legacy accounts such as email, phone, computer passwords, and even social media accounts should all be left with an heir in mind. All of these accounts are needed to settle a person’s estate. The fact that 61% or fewer of respondents have a plan for this could leave many grieving families in the lurch.
How people store digital assets
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Although the vast majority of people have digital assets, we asked how passwords are typically stored. Respondents could select several options.
A full 39% of people store their digital information in their heads. This tells us two things:
- Nearly 40% of Americans have no way to communicate important information in the event of an emergency or incapacitation.
- 39% of people are likely to use very simple, hackable passwords because they are easy to remember.
Obituaries are public, and there’s nothing stopping a hacker from exploiting the deceased’s identity through ghosting theft. The need to keep passwords secure is especially important for seniors, who are already at a higher risk of falling victim to identity thieves. In these cases, setting up an easy-to-use password manager for seniors can make the difference between preventing a loss or allowing malicious actors to take advantage of a tragic situation.
While it’s good that the majority of people store at least some of their passwords digitally, it’s important to know whether they’re simply using the AutoFill feature of their browser or a device, or have actually subscribed to a strongly encrypted password manager. As more people use device-specific methods of storing passwords, such as the new Apple Passwords app on iPhone, it’s important to share access to this information in case someone can’t access your device. Apple Passwords has the built-in feature to share all or part of your passwords with family members.
In addition to added security, some of the best password managers have a digital heir feature, meaning your information can be automatically sent to the contact person you specify without them having to wait for wills, probate, or other legal processes to be executed.
Who we share accounts with
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42% of people share their login information with their spouse, while only 13% share it with a parent and 8% with a friend. Given the number of singles and roommates, this low number means that the majority of unmarried people have not planned ahead.
Even more worrying, 34% of people have not shared their digital assets with anyone. The future of these accounts and all the assets they contain is at risk if there is no plan for them when you are no longer there.
Even if there is no one you want to share your information with right now, you may want to share it with a lawyer or estate administrator, but only 3% of respondents say they have actually done so.
Depending on the state, assets typically pass to spouses (but not long-term partners) and children. If no heirs are named by the state, the state can take away virtually everything you own. That’s why it’s so important to determine what goes where and to whom.
Where there is a will, there should also be online account information
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Only 24% of respondents mentioned their online accounts in a will.
While 41% had a will but didn’t mention online accounts, 35% had nothing. With 3 out of 4 Americans who responded to the survey having no designation about where their digital inheritance should go, we wonder which accounts are likely to disappear or remain untouched.
Leaving a mess
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Most people’s closest confidants are their significant others, so we asked people in relationships how easy they make it for their partners to access their accounts.
46% of respondents said their loved one would find out eventually. But remember that grief is different for everyone. If someone spends a week or two trying to find their bank password, they may find themselves in financial difficulty while also having to deal with funeral arrangements, expenses and emotional distress.
24% of respondents said it would be somewhat or very difficult for heirs to access accounts. Your loved ones will likely have to deal with tech companies or corporations and jump through mountains of red tape to get this information. Keep in mind that for some passwords that require two-factor authentication, your loved ones will also need access to the authenticator app or to SMS and email accounts that receive authentication passwords. If you use any type of passwordless authentication on your devices, such as Face ID or fingerprint access, you’ll also need a backup in case someone needs to access your device.
What remains behind?
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Do you have an account with funds that your relatives know nothing about?
Are you interested in sports betting? What about online games where you can win real money? Do you play with cryptocurrencies or online investment accounts? What would happen to all of this if you suddenly stopped logging in?
When asked, exactly half (50%) answered of respondents said they have accounts with monetary value that their partners do not know about.
Respondents had an average of $8,000 in online assets that would either be lost or delayed on the way to their heirs. In fact, there’s a good chance these funds would never reach their intended recipients. That’s more than just a chunk of change!
Make plans to remember your legacy
Digital estate planning isn’t as difficult as you might think. Apple iCloud Keychain users can designate an heir right from their phone, and many password managers offer features for estate contacts or digital wills.
The cost of digital planning tools like password managers is significantly lower than traditional estate planning, so you don’t have to worry about paying a hefty bill to protect your loved ones. All it takes is a little time and organization to provide your heirs with this important plan.
methodology
All About Cookies surveyed 1,000 U.S. adults over the age of 18. Responses were collected in May 2024.
This story was produced by All about cookies and reviewed and distributed by Stacker Media.
