One of the first roles of an executor of a will is to gather and secure their client’s assets.
This process includes ensuring the principle residence is locked and all known assets are secured. The executor has a fiduciary responsibility to do this for the benefit of all beneficiaries. One of the challenges an executor faces is actually obtaining a complete list of all assets of the deceased.
Years ago, it was not uncommon for an executor to think they had a listing of all assets, only to discover additional assets at a later time. Sometimes reviewing bank statements might trigger the discovery of additional assets such as transfers to accounts not previously documented. Going through the regular mail was also a way to obtain recently issued account statements and gather current information on assets. Sometimes opening up the mail would also reveal a cheque that could lead to the discovery of additional assets.
In the days before investments were held in nominee name, clients would often hold physical share certificates. In other situations, a share certificate for a growth stock that doesn’t pay a dividend would be found in a pile of papers or up in the attic. Does it have value or is it defunct?
When a certificate is found by an executor, we can help out by doing a search. The search will determine if the company has value or not. Every year, I find myself doing fewer and fewer certificate searches. People who still have share certificates with value are encouraged to bring them to a wealth adviser to put them into nominee name, especially in order to make things easier for your executor. If you have a share certificate that you know is defunct, then it is best to shred them to avoid confusion or uncertainty later.
On the opposite side of the spectrum from share certificates are paperless options. Clients have the option at most financial institutions to either receive statements or to go paperless. It is also not uncommon to see clients having multiple small RRSP accounts spread all over town. Clients who have selected paperless should ensure they have a mechanism for your executor to obtain completeness. Writing everything in a book that your executor can find is a good starting point.
What is becoming more important is for individuals to discuss their digital footprint with the executor they have chosen. In my personal will, I make reference to a “digital memorandum.” This is a complete listing of my digital footprint. The memorandum is divided into a few different categories — retailers, financial, utilities, telecom, work, social media and other. The memorandum contains all the pertinent details, including the website, username and password.
This digital memorandum ensures your executor can print off your paperless bills, as bill payment is one of their responsibilities. Many bills, such as utility bills, are now primarily paperless. After all bills are paid, it is then prudent to authorize your executor to close down all appropriate accounts.
With more options to have access to services online, there are more passwords to remember. We all know the frustration when you go to a particular site and you cannot remember the username and password combination due to increased security and constant password updates. This is why it is important to update your records each time you update or change your username or password. Best practices for passwords would be to never write this information down. In my opinion, that is not practical from two standpoints. First, unless someone has an unbelievable memory I would think this would be nearly impossible. My digital memorandum has hundreds of different user names and passwords, with hundreds of different passwords to remember. I would think best practices would be to ensure that you do not have the same password for everything you access. Second, it doesn’t matter how good your memory is once you have passed away. Your executor would not know any of your account information unless you record it in a manner that they can access.
As mentioned earlier, a good starting point for this is by writing everything in one book. This can work, but it is also harder to keep organized with constant updates. If your hand writing is anything like mine, it can be difficult for your executor to decipher. Another option would be to maintain these records digitally in either a Word or Excel file. This can make it easier to read and easier to update without having to erase or scratch out old information. You would simply delete the old information and replace it with the updated information. The Excel or Word document should always be password protected on your computer. It may be a good idea to give your executor the password to first log into your computer, and also the directory where the digital memorandum is stored along with the password to unlock the Word or Excel file.
Once you have decided on your preferred method of maintaining and updating your information, it is important to keep an updated printed copy of the digital memorandum with your original will in a safe and secure location. This will help your executor with their duties and allow them to deal with your digital foot print.
Kevin Greenard CPA CA FMA CFP CIM is a portfolio manager and director of wealth management with The Greenard Group at Scotia Wealth Management in Victoria. His column appears every week in the Times Colonist. Call 250-389-2138. greenardgroup.com