An estimated 85% of North Americans use online financial tools such as financial accounts, bill payments and digital currency, according to a 2012 BMO Wealth Institute survey. In 2011, Canadians surveyed valued their digital assets including entertainment downloads, personal records and career information at approximately $47,000 each, as reported in a 2011 survey by McAfee. As well, we increasingly store our family photographs and personal and business correspondence online including in the form of email and social media accounts.
However, for many Canadians how their digital assets will be dealt with on death or in the event of incapacity does not form part of their estate plan. Given the increasing financial and personal value of digital assets, it is important to discuss these assets with your advisors as a part of your estate plan. In this blog, we discuss three simple questions to assist you in planning your digital estate. As well, if you are an executor, you generally have duties to secure, value and manage any estate assets including digital assets, and many of the same considerations will apply.
Which digital assets do you own? An inventory can assist which can be set out in a memorandum or an online inventory and password bank service. The inventory should be kept up-to-date and your executor should know how to find it and whom to speak to about your digital assets if there is someone who usually assists you with any computer issues. You may wish to identify any domain names or other intellectual property which could increase in value.
How should your executor access your digital assets? For assets where you control the device such as a mobile device or flash drive, it may be enough to describe the device, its usual location, and username and password. For assets in online accounts, access is generally controlled by a contract with a service provider which may exclude others from accessing the account. Some U.S. states now have laws authorizing executors to access a deceased's digital assets, but Canada does not yet have such laws. Depending on the circumstances, your executor may need court approval to access your digital assets. You may wish to document if it is your intention that your executor should access certain online accounts.
What are your wishes for your digital assets in the event of your death? For example, should a social media account be maintained as a memorial or copied and deleted? If you run an online business, your executor may need to act quickly to ensure that its value is preserved. If any domain names or other intellectual property forms part of your digital estate consider your wishes for it. For example, you may wish to make a specific bequest of certain digital assets in your Will or set out your wishes for these assets in a written memorandum. As well, consider any personal and privacy concerns arising. Depending on the circumstances, you may wish to appoint a special executor to handle your digital assets.
Given the increasing personal and financial importance of digital assets to the daily lives of Canadians, there is no time like the present to acknowledge them as an important part of your estate plans, and to discuss them with your estate planning advisors.
Don't miss our next blog, which will survey the Canadian legal landscape with respect to division of property on death and marriage breakdown.
The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.