Digital asset planning a must in modern estates
By Kathy Rumleski, AdvocateDaily.com Contributor
As a person’s digital assets become increasingly complex, it’s important to include updated estate instructions around them, particularly if a child with special needs is involved, says Ottawa disabilities and estate planning lawyer Kenneth Pope.
“Many people have more digital assets than they ever contemplated. They need to draft wills that have provisions to cover virtual property,” Pope tells AdvocateDaily.com.
He defines digital assets or electronic property as intangibles that include online accounts, photographs, music, bank accounts, domain names, video games and more.
Pope, principal of Kenneth C. Pope Law, says it can be tricky to get all of your electronic data in order and frustrating if passwords for online accounts are not included with the lists.
“The digital world is not as current as the estate planning world is. If you have an account with Facebook or LinkedIn, for example, these corporations are not up to speed with today’s issues. If someone dies, you can close the account or leave it open, but the executor cannot access the account,” he says.
This issue recently came to light when a mother went to court to be able to gain access to her deceased son’s social media accounts, reports the CBC.
“The powers of attorney (POA) that are typically used for the families these days don’t adequately provide for them to do the kind of tracking that the mother needed to do,” says Pope who was not involved in the case and comments generally.
His firm is working to create new wording in a power of attorney (POA) that would allow access to online pages and accounts.
“Failing to leave behind instructions for disposal and access to information can cause problems for an executor that range from simply not having a password to not being able to access critical estate information,” he says. “Or the executor may not know that a digital asset or bank account even exists.”
As the New Year approaches, Pope suggests making a couple of resolutions: create a letter of wishes and do an estate inventory, including all of your electronic property. (His firm can supply a memorandum for an estate inventory or a letter of wishes, if needed.)
Remember, if you update passwords regularly — and you should — don’t forget to update your list for your executor, Pope says.
For those who don’t have a great deal of virtual property, consider a digital executor, he says.
“Perhaps you leave your important digital information with them. Trademarks, software, and domain names may have significant commercial value and you need to protect those assets.”
A letter of wishes is key, particularly if you have a child with disabilities, Pope says.
“This will tell your trustee things about your child that they may not know. The letter will also provide information such as how to apply for special services, at-home funding or the contact information at the supported living home where your child resides. It should also include your aspirations for the child and how you want the trust carried out,” he says.
Be sure a child’s POA has usernames and passwords for his or her online accounts, Pope says. Unexpected events can happen and someone may need to access the minor’s accounts. This would be particularly important if the child was being bullied on social media.
“How do you protect your child from an online bully? You have POAs for personal care and property, but you must be able to access their social media accounts to protect them,” he says.
One of the most valued items for families are the photographs, Pope points out.
“Digital assets should be treated the way we would treat all personal belongings and memorabilia of the deceased. You don’t want all the family photos to go to someone who simply gets the computer,” he says.
“We’ve included digital assets in the personal property clause of the will and we’ve provided that they are divided equally among surviving children. We treat them like jewelry and antiques.”
Pope says today’s wills must have provisions to cover electronic data.
“Law firms should start to focus on POAs that have effective powers for digital assets for their clients, too.”