The digital hereafter

Getting your "Internet house" in order

Just as your will or estate plan should set out clear instructions for your worldly goods, it’s now necessary in today’s technology-driven world to incorporate your digital assets into the estate-planning process. We explain why and identify some key considerations to create a more thorough estate plan that includes your digital presence.

What is a digital asset or account?

A broad definition of a digital asset is a document or other form of information that is stored on a computer (including a phone, tablet, smart watch) or online. A digital account is how you access those files.

Chances are you have an email account, computer files and an online bank account. You possibly use at least one social media platform (Facebook, LinkedIn, Twitter etc.), store photos on your cell phone or on iCloud, and download electronic books and music. The point is that each of us has a digital life or footprint to some extent. Now, consider what you’d like to happen to these intangible assets and online accounts when you die or if you become incapacitated: Can the assets themselves be transferred or bequeathed? Should the accounts be preserved or deactivated?

Remember, without leaving details of your virtual assets and outlining your instructions, your executor or family members are left to sort through your digital belongings. And if they’re disinclined to deal with this process, these assets may remain inaccessible to your beneficiaries – effectively forgotten in cyberspace.

Why estate planning for digital assets is important

It’s often difficult to focus on mortality or death when you’re younger and in good health; but, developing a comprehensive estate plan that includes instructions on digital assets is simply a pragmatic move at any age. Like tangible assets, digital assets can have sentimental and/or monetary value. So, beyond a properly drafted will, your estate plan should also document your virtual possessions and online accounts with specific directions: Should an account be deleted, for instance, photos stored, and your online documents archived and saved?

In addition to reflecting your wishes, these details will enable an executor (a liquidator in Quebec) or estate trustee to identify the totality of your estate’s assets and liabilities. Moreover, this can also help avoid potential issues such as account manipulation or identity theft and address any immediate responsibilities such as bill payments.

Which digital assets or accounts do you have or use?

For the purposes of an estate plan, digital assets can be broadly sorted into three categories:

1. Personal digital assets with monetary value

Any accounts that are used to manage money

  • Bank accounts
  • Airline loyalty cards (Aeroplan, Air Miles etc.)
  • Retail store cards (Shoppers Optimum card; HBC card etc.)
  • Online sales accounts: Amazon, PayPal, eBay, Craigslist, Kijiji, Etsy etc.
  • Virtual or cryptocurrencies such as Bitcoin etc.

Art, music or other intellectual property

  • Apple Music
  • Apple Books
  • Dropbox
  • Amazon Kindle
  • Kobo

Any digital assets that generate revenue for you

  • Websites
  • Blogs
  • Domain names
  • Video or online gaming accounts

Computing hardware

  • Computers
  • External hard drives

2. Personal digital assets with sentimental value

These can include digital assets with monetary value as well as social media accounts;
family digital photo and video-sharing accounts; personal email accounts.

Email and webmail

  • Gmail
  • Outlook
  • Yahoo
  • Hotmail

Family digital photos

Video sharing accounts

Social media

  • Facebook
  • LinkedIn
  • Twitter
  • Google
  • Youtube
  • Instagram
  • Pinterest

3. Business digital assets with monetary value

This includes any digital property owned by a business organization.

  • Email contact lists and client/customer lists
  • Products in an online store
  • Websites or blogs
  • Business processes (on spreadsheets, for example) that employees have developed and may be duplicated and sold
  • Apps created by the business to sell or for its own use
  • Intellectual property

    What to know about digital assets and your “rights”

    For some digital accounts like book and music libraries – iTunes, Dropbox, Amazon Kindle, Apple Books. Kobo etc. – you only own a license to use the digital files and therefore do not actually “own” the items in the sense of a physical item. Accordingly, it’s not possible to gift items that you don’t own. Check the terms of service for each provider as well as the owner of the intellectual property itself for guidance on the rules regarding transfer of ownership or bequeathing these items.

    Compile a list

    You should make plans for your digital assets in the same way you would any other asset. The first step is to take complete inventory, along with usernames and passwords used to access these virtual items and accounts. 

    A master document containing these details (a list of assets, usernames and passwords) should be safely stored (physically or digitally) and accessible only to your trusted representative – either an estate planning professional, advisor, executor or family member. While this individual should be tech-savvy, you should consider making your instructions clear and appropriate for your executor’s level of technical understanding.

    Importantly, while the instructions themselves can be included within your will, usernames and passwords should not be cited in this document because it is a public record. And just as it’s recommended that you regularly change passwords for each account, it is critical that you update the master document to reflect these changes. Be cautious about sharing your passwords as your agreement with each provider may preclude you from sharing passwords.

    Consider, for example, using an online password manager – a program that keeps all your log-in details within an online safe-deposit box. Share the password to your password manager with your executer or a trusted loved one. But take some time to research password manager services – they’re not all created equal and you want to be certain it is safe to place all your digital eggs in one basket.

    Password use has climbed from about 25 passwords per user in 2007 to 130 in 2015 and is projected to grow to 207 in 2020, according to a U.S. report published by ISE, a security consulting firm.

    Digital estate plan checklist

    Take inventory of all your online accounts, online assets and devices.
    Back up important data and devices.
    Consider using a password keeper program for all your passwords and share the access to the keeper with your appointed trustee or loved one.
    Specify your final wishes for your digital assets in your will.
    Communicate your final wishes directly to your loved ones.
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