ESTATE PLANNING and WILLS Estate planning is essential for everyone
While cryptocurrencies such as Bitcoin and Ethereum have raised awareness of digital assets, they are by no means the only digital asset that has monetary value. istock.com
Half of all Canadians believe they are too young to worry about writing a will or don’t have enough assets to make it worthwhile, according to an Angus Reid Institute poll published earlier this year. That’s a mistake, says Sharon Hartung, an author and member of the Society of Trust and Estate Practitioners’ (STEP) Digital Assets Special Interest Group.
“An increasing number of Canadians have digital assets, and a significant percentage of those people are young,” she says.
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...who do you want to leave your family digital photos to; do you want your social media sites shut down or memorialized?”
While cryptocurrencies such as Bitcoin and Ethereum have raised awareness of digital assets, they are by no means the only digital assets that have monetary value, says Ms. Hartung. Others include web domains, PayPal accounts, online gaming accounts, loyalty points and revenue from online ads or sales.
But some digital assets such as photographic and music collections and e-books stored in the cloud may have considerable sentimental value and could be lost to heirs if the owner does not provide enough direction in a will on how to deal with them.
Similarly, social media accounts like Facebook, Instagram, YouTube, Google and LinkedIn may be inaccessible and remain active if no prior provision is made for a legacy contact or inactive account manager.
Ms. Hartung points out that the website Dead Social, which provides a range of online tools, resources and support mechanisms to help people prepare for death online, found in a survey in 2016 that 94.7 per cent of respondents said they had not set up a Facebook legacy contact, and 97.2 per cent had not set up Google’s inactive account manager.
And that’s not all to consider, says Ms. Hartung. Other digital assets that may need to be provided for in a will include online household management systems, online access to household bills and bank accounts, and digital security systems.
“The simplest way to think of digital assets is as another class of personal property assets in one’s estate,” she adds. “As with other assets, an individual may have wishes, preferences and intentions for their digital assets. For example, who do you want to leave your family digital photos to; do you want your social media sites shut down or memorialized; what do you want done with your blog?”
Ms. Hartung points out that digital assets with a financial value may be taxable at the time of death or disposition, so it’s important to keep records of purchases and expenses incurred and get tax advice if necessary.
One of the challenges in dealing with digital assets is they may be difficult to detect if not specifically identified in an inventory and made available to an executor or a person named in a power of attorney in the case of physical or mental incapacity.
She says it’s also important to leave access information, such as passwords, in a secure place, and to consider security guidance from the online providers to avoid potential criminal liability, address privacy concerns or other actions that may contravene any terms of their licensing agreements. As an example, don’t be disappointed that you can’t bequeath your iTunes music collection to someone else.
“On the other hand, digital accounts with an underlying physical asset, such as bank accounts, should not be accessed by the executor. They [the executor] should instead present themselves to the institution’s ‘bricks-and-mortar’ place of business with their original legal documents and allow the institution to follow its due diligence process,” says Ms. Hartung.
The biggest challenge in dealing with digital assets is the number of Canadians who don’t have a valid will of any kind. The Angus Reid Institute poll found that 51 per cent have no last will in place, while only 35 per cent have one that is up to date. In other words, according to the Institute, half of Canadians are set to have no say in what happens to their assets should they die.
“If you do not record your wishes and preferences, it will be difficult and at times impossible for anyone left behind to know what to do,” says Ms. Hartung. “It won’t be clear who has the power to deal with any of your assets, let alone digital assets. The best way to avoid that is to have a valid and up-to-date will.”
Ms. Hartung’s book, Your Digital Undertaker – Exploring Death in the Digital Age in Canada, is scheduled for publication this fall.
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