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Here’s why your estate plan needs to include digital assets

(Reading time: 3:30) 

It’s estimated that a whopping 96% of Canadians are online.

That’s 34.56 million people browsing, clicking, banking, gaming, zooming, teaching, learning, shopping, streaming, posting, sharing, liking, tweeting—and that’s all before noon.

Our virtual footprints are vast and have the potential to be limitless. Yet we, being mere mortals, are not.

So, what happens to our endless web of digital assets when we’re no longer here?

Well, if those assets aren’t baked into your estate plan, your loved ones could be in for a fight.

Case and point, recently there was a case of an Ontario widow who was locked in a four-year battle to gain access to her late husband’s online accounts. While she legally owned the content (being the executor and sole beneficiary of her husband’s estate), digital assets fall under the governance of privately held corporations. This meant that showing the necessary proof, such as her husband’s death certificate and probate documents, weren’t enough for the woman to gain access to the digital assets he had left behind.

Then there is the whole matter with cloud storage.

More and more people are uploading their music, movies, and photos to the cloud (a centralized digital storage realm) as a means to keep all of those digital files safe. Many of the latest cell phones and computers even automatically backup your data and media to the cloud without you even realizing it. If you were to die without having a plan in place for those digital assets (and nobody else had access or was even aware of your cloud storage), you would have no control over what happened to the contents.

Plus there is the added challenge of geography.

Even if Canadian laws were to stipulate that digital assets would automatically pass on to beneficiaries upon a person’s death, there is no guarantee that the non-Canadian companies controlling said assets would comply.

That’s why you need a separate estate plan strategy for your digital assets.

But where do you even start?

By first making a list of each and every one of those digital assets (including how to access them).

Digital assets can be ‘virtual’, including:

  • Online banking, investment, and pension accounts
  • Online shopping memberships and rewards programs
  • Email, streaming, music, gaming, and online dating accounts
  • Home services that are managed online (e.g., internet, utilities, cable)
  • Social media accounts, blogs, personal websites, and domain names
  • Cell/mobile phone (including any installed apps with monthly charges)
  • Virtual storage sites and cloud drives (e.g., Google Drive/Cloud, Apple iCloud, OneDrive, etc.)
  • Digital currency (e.g., PayPal, Venmo) and/or Cryptocurrencies held (along with their amounts)
  • Intellectual property—this includes copyrighted materials, trademarks, and/or any code
    you may have written and own

Digital assets can also be hardware such as:

  • Computers
  • Smartphones
  • Tablets/e-readers
  • Hard/flash drives
  • Digital cameras

Although itemizing your digital assets can seem like a daunting task, keep in mind that the average Canadian holds approximately $10,000 worth of digital assets. So, it’ll be time well spent.

Next, decide what you want to do with those digital assets.

Since each asset will vary, you may want to request that certain assets be managed differently.

For example, you may want money, music, and photos to be transferred to friends and family members, while preferring that social media profiles, email accounts, and cloud storage be deleted or closed down.

The best way to ensure your wishes are carried out is to assign a digital executor.

While certain wishes may conflict with the service agreements of a particular company (as some social media platforms restrict access to an account upon the account holder’s death), it’s still beneficial to let your digital executor know what your wishes are.

To give those wishes clout, formalize them as part of a legally binding document.

If you already have a will/estate plan in place, add a section dedicated exclusively to the management of your digital assets.

A few things you’ll want to keep in mind when creating your digital estate plan:

  • Be sure to include your complete digital asset inventory (the list we mentioned earlier)
  • Make sure your digital executor knows where each of the assets on that inventory is located
  • Do not include passwords, or detailed information (as your will becomes a public document when you die, which means anyone will be able to access/read it)
  • For any sensitive information, create a separate document that contains all of the necessary specifics, including any passwords needed to settle your digital estate
  • Store this outside document in a secure but accessible location (e.g. at home in a fire/waterproof safe or in a safety deposit box at a local bank or credit union) and give a copy to your digital executor, estate lawyer, and/or a trusted family member

When it comes to estate planning, you’re never too young to get your digital ducks in a row.

And Educators Financial Group can help with that.

Regardless of where you happen to be on the age spectrum, we can provide you with the essential building blocks to developing your own solid digital estate plan.

Reach out to us—we’ll get back to you with some educator-specific advice.

Plus be sure to check out other insightful articles in our estate planning series:

Estate planning essentials for education members of every age

Estate planning: powers of attorney, guardians, and trustees

Estate planning: it’s not what you know; it’s whom you know

Sources:
https://www.statista.com/statistics/243808/number-of-internet-users-in-canada/
https://www.cbc.ca/news/business/widow-apple-denied-last-words-1.5761926
https://www.advisor.ca/tax/estate-planning/estate-planning-for-clients-digital-assets/

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