Tag: Estate Administration Act

01 Sep

Don’t Forget Your Digital Assets When Drawing Up a Will

Ian Hull Estate Planning, New Media Observations, Wills Tags: , , , , , 0 Comments

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.

Ian Hull

29 Apr

Estate Information Returns: What’s That All About?

Kira Domratchev Estate & Trust, Executors and Trustees, Trustees Tags: , , , , , , 0 Comments

Were you recently appointed as Estate Trustee and needed to obtain a Certificate of Appointment of Estate Trustee (otherwise known as “probate”)? In that case, you need to know that an Estate Information Return must be filed with the Ministry of Finance within 90 days of the date of the appointment, setting out the assets in the Estate and their corresponding date of death values.

Typically when an Application for Certificate of Appointment is filed with the Court, a trustee may not have access to every asset of the Estate such that that the value of the Estate may not necessarily be accurate.

As a result, when an Estate Information Return is filed following the Certificate of Appointment being granted, all of the assets of the Estate must be listed. Depending on the values of the assets as confirmed by the trustee following the Certificate of Appointment being granted, a refund may be issued in the event that Estate Administration Tax was overpaid or additional tax may be payable in the event that the value of the assets as listed on the Application is lower than what was listed on the Estate Information Return.

The Estate Information Return may be audited by the Ministry of Finance for up to four years after it is filed. As such, it is important to retain all relevant records in the event of such an eventuality. Another important consideration is that the Ministry of Finance will not typically provide confirmation of receipt of an Estate Information Return so it is prudent to send it via means that would provide you with confirmation of delivery such as fax.

Finally, if a trustee finds out any additional information regarding the value of the assets of the Estate that has any bearing on the Estate Administration Tax payable, an amended Estate Information Return must be filed within 30 days of the new information being uncovered.

Thanks for reading!

Kira Domratchev

Find this post interesting? Please consider these other related posts:

File Your Estate Information Return On Time

The Estate Information Return and Multiple Wills

Hull on Estates #468 – Personal Property, Digital Assets and the Estate Information Return

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