Since the invention of the internet, our daily use of digital tech has exponentially increased to the point where a life without it seems incomprehensible. The average person likely has at least one form of digital assets. These assets can range from social media profiles and email accounts to cryptocurrency wallets and cloud storage.
With this increased use of digital assets, more and more people are seeking advice on what happens to these assets when we pass away. Estate planning, once limited to tangible assets and property, has now evolved to include the management and distribution of digital assets, presenting new challenges and opportunities for individuals and their estate plan.
What are Digital Assets?
Digital assets exist only in electronic form. Their form is wide-ranging and includes any data that has monetary and/or sentimental value. This may include, but is not limited to: personal emails, social media accounts, digital photos, financial accounts, cryptocurrencies, domain names, video-game items or intellectual property.
Failing to address their management in your estate plan can lead to complications and potential losses, and so it is recommended that an inventory of these assets be created to identify all online accounts, usernames, passwords. The inventory should be stored in a secure and confidential manner.
How Do Digital Assets Get Dealt With?
Many people wonder: who has access to these accounts after their death? In the case of an intestacy, unless passwords were shared prior to death, then access is not permitted to those accounts.
Oftentimes, corporations require court orders to grant account access from a deceased to those seeking it. The much-referenced case of Henry v. Bell Mobility, 2017 ONSC 6070, 284 ACWS (3d) 416 gives a valuable example of difficulties that may crop up in similar situations. The deceased’s mother, Maureen Henry, required a court order to obtain all the deceased’s accounts, passwords, documentation and information from Bell, Google Canada, Facebook and Apple Canada. The court ruled in Mrs. Henry’s favour. However, only Bell and Apple complied with the order. Some of these corporations are based in foreign jurisdictions, and so even where a court order has been produced, the corporation may not comply with the order. As digital assets inherently have a global aspect to them, this may complicate the normal estate administration process.
Specific digital estate planning tools have emerged to address this issue. Some companies offer services that allow you to outline your preferences for digital asset management and appoint a digital executor. While these tools can streamline the process, digital asset management should still be addressed in every comprehensive estate plan.
When it comes to social media, platforms like Facebook and Google now offer options for users to designate a legacy contact or an inactive account manager. These individuals can “memorialize” or delete your accounts, but it is essential to communicate your preferences clearly.
Digital assets can also have financial implications. For instance, cryptocurrencies like Bitcoin can be worth a significant amount of money and failing to provide access to your wallet or private keys can result in the loss of these assets. Including instructions on how to access and manage these assets in your estate plan is crucial.
While the digital realm continues to pervade our lives, estate planners should adapt to include the management of these assets. Failing to address these assets can lead to complications, financial losses, and the disregard of wishes. Taking proactive steps to inventory, manage, and communicate your preferences is essential in safeguarding your digital legacy.
If you require estate planning, our Estates group would be happy to help.
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, real estate law, estate law, employment law, health law, and tax law. For over 130 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125. The material provided through the Mills & Mills LLP website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.