Don’t forget your digital property in estate planning
By Mia Clarke, Associate Editor
“Since the concept of digital property is so new, it is rarely addressed in wills, often leaving ill-equipped trustees or family members to attempt to navigate a web of online accounts and assets,” says Urback, an associate with Shibley Righton LLP’s Toronto office.
And what might be a modest investment right now, could balloon into a fortune, he says.
One of the earliest transactions involving Bitcoin was the indirect exchange of 10,000 units for two pizzas in 2010, says Urback. Today, those Bitcoins are worth about $100 million US.
He tells the Post that cryptocurrencies are only part of the story.
“Social media accounts have become an integral part of our lives. Rewards programs, travel miles and even gaming profiles are also increasingly common, while email accounts routinely carry massive amounts of information, sentimental history and value,” Urback writes.
He says it’s important to make decisions well ahead of time “to ensure that these assets and accounts are passed along in the manner intended.”
Urback says people should consider appointing an “electronic” estate trustee within a will.
“While an electronic estate trustee would have the same general duty as the executor or ‘traditional’ estate trustee — carrying out the wishes of the deceased — their role would be much narrower: this individual would be simply tasked with managing and administering digital assets and accounts, and could be selected based on their trustworthiness and technological savvy,” he writes.
He says it’s important that the trustee knows what to look for.
“Currently, many rewards programs allow for a deceased person’s points to be transferred, but if your representative doesn’t know you have enrolled, there’s a chance an asset worth hundreds, if not thousands, of dollars could be lost,” says Urback.
Finding such assets are just the first step, he says.
“Cryptocurrencies such as Bitcoin, which are tracked on a public ledger, can only be accessed by an individual holding a private password. That password could be stored online, on a private computer, on external devices or even scrawled on a piece of paper. Individuals must ensure this knowledge also makes its way to the electronic estate trustee — Bitcoin has no central registry, so a forgotten password and backup sadly means a huge loss.”
Urback says the process can be even more complicated with digital accounts because each provider has its own terms and conditions.
“Facebook, for example, has acknowledged that the handling of pages of people who have died is a growing concern,” writes Urback.
“In response, the company has allowed users to appoint a legacy contact who is provided with limited access to a user’s page after the original user dies. While a legacy contact can write pinned posts and update a user’s profile, the legacy contact cannot technically log in to the account or remove or change past posts.”
If a contact hasn’t been appointed, explains Urback, Facebook requires confirmation from a family member or executor.
“This is where the electronic estate trustee can step in. Upon providing the right confirmation, the electronic estate trustee could even request removal of the Facebook account.”
Urback advises people to give their electronic estate trustee a list of all their digital assets and accounts, along with the passwords.
“You should not, however, put a password directly into a will, as wills generally become public. Finding another way to convey that information is best,” he says.
So-called electronic wallets or password managers can be used. Urback says they’re “essentially a safety deposit box in which the ‘valuables’ are the passwords for email, reward programs, social media and so on.”
“Digital assets and digital accounts are becoming a massive part of people’s lives. They will continue to accrue incredible value. Taking the right steps to preserve this property and pass it along in accordance with an estate plan is not an easy endeavour.”
Using an electronic estate trustee can help ensure one’s wishes are carried out and digital property doesn’t disappear into the online ether, says Urback.
“As time goes on, the use of digital assets and online accounts should only increase. Although still a bit unusual today, there may be a time when including digital assets and accounts in your estate plan is second nature,” writes Urback.
“Even if your assets are only worth a couple of pizzas now, who knows what they will be worth in the future.”