Due to the pervasiveness of the internet and modern technology, most Canadians are leaving behind a “virtual estate” after death. A “virtual estate” is all the deceased’s digital assets left behind, including electronic possessions such as financial information, songs, tweets, photos and social media. A digital asset is a file or record that one has the right to use electronically.
Several problems arise when there are no instructions to a power or attorney or estate trustee. Financial accounts could be difficult to identify and access and social media accounts could remain open. Digital assets are left vulnerable to hacking. Further, there is much risk to the continuation or succession of a business if the successor is unable to obtain electronic access to accounts or know which accounts exist. Imagine an online business where one is unable to log on or fulfill orders.
Most Canadians only consider their tangible assets when conducting their estate planning and do not take their virtual estate into account
Estate Planning for Digital Assets
Preparing a memorandum with usernames, passwords and instructions for each to catalogue your digital assets and services would be of great assistance to your estate trustee.
There are also some new proactive digital-estate planning tools which have emerged. Google’s “Inactive Account manager” is a service enabling an estate trustee to delete some or all of your data after specified periods of inactivity, or to pass data from the accounts along to one or more individuals.
Estate Administration for Digital Assets
Some of the issues that have gained attention in estate administration of digital assets include the following:
- Accessing the digital devices. The physical property and all the rights to it vest in the estate trustee. As such, the executor is entitled to circumvent passwords and security measures if necessary to gain access and secure/restrict access to any devices
- Accessing the digital assets where the deceased has left passwords for his or her online accounts
- Backing up digital assets with financial or sentimental value (where possible/appropriate).
- Verifying the assets in an inventory and then cross-referencing any pre-existing memorandum to ensure all assets are included
- Securing and valuing digital assets with ascertainable value for probate and accounting purposes. Determine whether to transfer the asset in kind or in cash
- Determining and paying liabilities relating to digital accounts
- Transferring assets without determinable value to the beneficiaries in accordance with the Will or otherwise intestacy law if there is no Will
- Protecting the privacy of the deceased subject to any instructions for dealing with personal information
- Closing accounts when all assets have been recovered
We can help.