Tag: digital asset
A recently released report by Johan David Michels, Sharon Hartung and Christopher Millard entitled “Digital Assets: A Call to Action” identifies significant difficulties faced by estates, estate trustees, planners, beneficiaries and their solicitors in dealing with digital assets.
The authors surveyed over 500 members of the Society of Trust and Estate Practitioners (“STEP”) around the world.
The key findings of the report are:
- Digital assets have become a common part of modern estate planning and estate administration, with demand for advice expected to increase significantly in the future.
- Clients seeking digital asset advice in relation to both estate planning and estate administration, with social media and email accounts topping the list of most-asked-about assets.
- Clients frequently experience difficulty accessing digital assets on death or incapacity of a family member, causing distress and frustration.
- Third-party service providers can present practical, procedural and legal obstructions to both estate planning and estate administration.
- There is wide variation in policies, practices and tools for dealing with clients’ digital assets, highlighting the need for more education for practitioners on best practices.
- Law reform is needed to enable effective estate planning and estate administration for digital assets.
The report concludes with a call to action. “Accessing digital assets after a loved one’s death can pose a challenge. As digital assets become more prevalent and our lives become increasingly entwined with digital technologies, the need for effective solutions becomes ever more critical. These solutions require a joint response. Bodies such as STEP and its members need to engage with governments and service providers globally in order to produce industry solutions and best practices that will help families plan for their futures with certainty and clarity.
The report also contains links to useful resources for practitioners dealing with digital asset issues.
Thank you for reading.
When you think of the assets to be distributed upon an individual’s death, the common ones are bank accounts, investments, real estate, and any heirlooms or valuable items that have been accumulated during one’s lifetime. But we can’t forget digital assets as well.
Digital assets are any type of content stored digitally on a computer, website or on the cloud. Most of us are online every day for work and personal reasons, generating documents, sending texts and sharing images. These are all digital assets. So are frequent flyer or store reward programs that allow people to accumulate points that could grow to have substantial worth.
If you think your digital assets won’t amount to much, think again. A 2013 study by McAfee, an American-based global computer security software company, found that the average American had more than $35,000 of assets stored on their devices. Our digital profiles have certainly increased since then, and so has the need to protect those assets when we die.
Millennials, generally defined as those born between 1981 to 1996, know the value of digital assets. They grew up in the digital world and place great value on the movies, music and apps on their various devices.
As they age, they are starting to think about estate planning, sometimes in ways that older generations may not be familiar with. For example, their estates may include Bitcoin or other cryptocurrencies. Their financial profile will not only encompass traditional bank and investing assets, but perhaps PayPal or other financial apps.
Social media accounts are another important form of digital asset. We probably all know someone who has died but their Facebook page lives on. This occurs because when a social media account is opened, the person is asked to approve a user agreement that often prohibits sharing passwords. On death, these agreements can force the executor into long battles to gain access to the account, often in a foreign jurisdiction where the online firm is based.
By listing your digital assets in your will and by designating someone, perhaps your executor, to manage those accounts after your death, you can ensure your online profile does not outlast your time here on Earth. Of course, you have to provide that person with your login information for each of their social media and crypto-currency accounts. Some people rely on a digital vault – which is really an online safety deposit box – to store this information, with the password for the vault shared with their executor.
Digital assets are crucial for those operating online businesses, as they include their website and all its content, plus the firm’s social media and email accounts. Financial information about clients is also part of that, contained in online accounting programs that perhaps only one person can access.
There have been limited legislative reforms to address digital assets. In 2016, the Uniform Access to Digital Assets by Fiduciaries Act was introduced, based on the American Revised Uniform Fiduciary Access to Digital Assets Act. It would provide, by default, access to fiduciaries (including executors) to digital assets, though this Act has yet to be adopted by most provinces and may not be binding on firms based outside of Canada.
In Ontario, the Estates Administration Act does not explicitly refer to any assets of a digital nature. Nor does the Substitute Decisions Act, which governs what happens when someone is not capable of making certain decisions about their property.
Alberta’s Estate Administration Act is the only Canadian succession-related statute to make reference to online accounts within the context of the executor’s duty to identify estate assets and liabilities, which includes online accounts.
Given the amount of digital information that is recorded about each of us, our digital assets reflect the lives we lived. Since Canadians are online more than ever, our electronic footprint is increasing, and so is the need to address digital assets in our wills.
Thanks for reading and have a great day.
Yesterday, I blogged about estate planning for cryptocurrency, a type of digital asset. Today, I provide a snapshot of what happens to some of your other digital assets when you die.
Facebook: When a Facebook user dies, their profile can either be memorialized or permanently deleted. The Facebook user can opt for one or the other while they’re still living. If a user does not choose to have their profile permanently deleted, Facebook will automatically memorialize the profile whenever they become aware of the user’s death. When a user proactively chooses to memorialize their profile, they can appoint a “legacy contact” to manage their memorialized profile. The legacy contact will have the authority to manage the memorialized profile but will not be permitted to log in to the deceased’s account, read the deceased’s messages, and add or remove friends.
Instagram: When an Instagram user dies, their account can either be memorialized or deleted. Anyone can request for a deceased person’s account to be memorialized, but only an immediate family member can request for an account to be deleted. Instagram will not memorialize an account without sufficient proof of death, such as a link to an obituary or news article. To delete an account, the requester is required to verify that they are an immediate family member by providing documentation such as the deceased person’s birth certificate, death certificate, or a Certificate of Appointment of Estate Trustee for the deceased’s estate.
Twitter: When a Twitter user dies, a person authorized to act on behalf of the deceased’s estate or a verified immediate family member of the deceased can request to have the deceased person’s account deactivated. In order to complete this request, Twitter requires a copy of the requester’s ID and a copy of the deceased’s death certificate. Twitter also does not permit anyone to access the deceased person’s account.
LinkedIn: When a LinkedIn user dies, anyone can request to have that person’s LinkedIn profile removed. A person can request that an account be removed by filling out a form with information on the deceased and submitting the form to LinkedIn for their review.
Google: When a Google user dies, their immediate family members and/or the executor of their estate can request to close the deceased’s account. Google will not permit anyone to log into the deceased person’s account; however, individuals can ask Google to provide content from the account. With respect to these requests, a court order issued in the United States is apparently required before Google releases any information. To circumvent this, Google users can use their Inactive Account Manager to automatically share their data with “trusted contacts” after a period of inactivity.
As illustrated by the above, different online platforms restrict a family member’s and/or executor’s access to a deceased person’s online accounts to varying degrees. Notably, most platforms will not allow anyone to log in to a deceased person’s account. As such, if a person would like trusted relatives or friends to be able to access their online accounts following their death, they may want to take steps to ensure that their login credentials will be available to those trusted persons.
Thanks for reading!