Don't take your passwords to the grave

Now imagine that both you and the person you've designated to handle your affairs have died. (This isn't much of a stretch, if the other person happens to be your spouse and you ever travel in the same car. One accident could wipe out both of you.) Figure out who would take over in that case, and ask the same questions again.

Spare them the distress

You might be tempted to let your heirs figure it out on their own. After all, they eventually should be able to access accounts -- those they know about, anyway -- using your death certificate and will, trust or court document showing their right to settle your estate.

But you may be causing them unnecessary trauma and significant financial distress, particularly if they have to cover the bills for your funeral and then wait months to be reimbursed, or they wind up supporting your family and their own.

Your Money poster T-Bird_Money has thought this through:

"In my case, I'm a single parent, with bills needing to be paid. My brother, who would be the executor, has his own login on my computer as administrator, so he could go in and change the password on my user in case he needed access," T-Bird_Money wrote. "I have an Excel sheet listing all accounts, usernames, and passwords with semi-current amounts. Also listed (are) all life insurance policies with face amounts and contact info. Until such time that the life insurance proceeds come through, he may need to go on to Scottrade and sell some stock to keep paying the mortgage and expenses for things."

The issue of passing on passwords is so important in this increasingly digital world that Los Angeles estate-planning attorney Jon Gallo, the co-author of "The Financially Intelligent Parent," requires his clients to fill out a "game plan" that includes their account numbers, online IDs and passwords.

This document is placed in a sealed envelope in Gallo's office along with the client's other estate-planning documents. Because account details can and frequently do change, Gallo asks clients to update the document annually. The system creates piece of mind for his clients and, eventually, for their heirs, he said.

"Their family members are not going to be firing on all cylinders anyway," Gallo said. "This can really help."

Your game plan

A lawyer's office is a good repository for such sensitive information, but it probably shouldn't be the only one. As Hurricane Katrina and numerous other recent disasters have shown us, one catastrophe can wipe out an entire area, so having copies of the document in more than one place makes sense.

Marty Kuritz, the author of the estate-planning organizer "The Beneficiary Book," recommends making several copies of the document, storing one each in:

• Your home safe or other secret, secure, water- and fire-resistant location in your home.

• A secure off-site location such as a safe-deposit box.

• An out-of-state location, such as with a trusted relative.

Kuritz also suggests writing down the answers to common security questions, including your mother's maiden name, the street where you were raised and the name of your first pet. Finally, you need to tell your trusted someone(s) where to find the documents.

"Secret passwords, combinations, etc., are truly for no one's eyes but a privileged few," Kuritz cautioned. "Verbally communicate (the documents' whereabouts) to your most trusted people who have an absolute need to know."

Both the print and online versions of Kuritz's book include fill-in-the-blank forms to organize this information. You can also create a simple spreadsheet that lists accounts, account numbers, contact phone numbers, online IDs and passwords. (I've included on my list due dates for any bills, as well as how those bills are received, online or by mail, and how they're paid, by automatic debit or online bill pay.)

To get you started on your list, consider including:

• Your computers and laptops.
• Bank accounts.
• Online bill-payment systems.
• ATM cards.
• Credit cards.
• Brokerage accounts.
• Retail or seller accounts (eBay, Amazon.com, etc.).
• Voice-mail accounts.
• E-mail accounts.
• Home-security systems.
• Computer-security systems.
• Entry gate at gated communities or storage facilities.
• Keyless-entry locks.
• Cell-phone locks.
• Safe combinations and the location of any keys.

Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

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