Digital access drives nearly every activity in the world — from the way people manage money, to the way they keep in touch with family and friends. It's no wonder technology is impacting estate planning as well. Today, making arrangements for your digital legacy may be almost as essential as preparing a Will.
“For the past several years we've been talking with our clients about how, as executors, we can identify and take control of their digital assets," says Leanne Kaufman, head of RBC Estate & Trust Services and president and CEO, Royal Trust Corporation of Canada and The Royal Trust Company.
From a practical perspective, people are shifting from keeping their personal information in a file folder at home to storing everything digitally, says Carmela Guerriero, Quebec regional vice president, Estate & Trust Services at RBC Wealth Management.
“We're starting to see the difficulty for executors if they're not aware of how things are stored and don't know how to access them," says Guerriero. “People are uploading documents to the cloud and storing things on a USB or an external hard drive."
Complications from digitalization are anticipated to grow over time as more people stop keeping relevant contact information, account information and safe deposit box keys in a place easily accessible to their executor.
“Someone recently mentioned that the best gift his father-in-law left for his family was an accordion file with everything meticulously laid out for everyone," says Kaufman. “It's essential that people put everything together, store it securely and have it accessible to an executor. It doesn't matter whether that's on paper, a USB, an external hard drive or in the cloud. It just matters that it's there and accessible."
Types of digital assets
A list of passwords and answers to security questions for all relevant sites is a good place to start gathering your digital assets, but they include more than just online bank and investment accounts.
“Your digital assets could include intellectual property stored only in digital form such as unpublished literature or photos that could have monetary value or sentimental value to your heirs," says Kaufman. “We need to understand what happens when someone passes away who owns bitcoins and find out how to take control of that account or transfer ownership."
Social media accounts are also part of your digital legacy.
“There's a virtual imprint of the deceased on sites like Facebook, Twitter, Instagram, LinkedIn and YouTube," says Guerriero. “Each site has different rules about how you can give someone authority to close your account. There's no way to close that off without following through on permission and authorization options."
“Another question with social media accounts," adds Kaufman, "is whether the governing law over the account is where the company is located, such as California for Facebook, or where the account holder lives."
These questions about governing law become even more important when something is monetized, such as YouTube channels that make money for their owners, says Kaufman.
“Google has been marketing something they call an 'inactive account manager' that allows you to designate someone to be notified if your account is inactive for a specified amount of time," says Kaufman. “The question is who will have authority over that account: your executor or your designated account manager? If it's not the same person, that could be an issue, especially if it's a monetized account."
Check the settings on your social media account to determine how they may be handled after you pass away.
Reward points on credit card accounts and frequent flyer miles can also be an issue. Sometimes they can be worth thousands of dollars. Yet not everyone keeps track of them or thinks ahead to include the information for their executor to access those accounts.
“We tell our clients 'you need to inform your executor of what's out there and how to access it,'" says Guerriero.
Video and digital messages left by people for their friends and relatives are becoming more common, including sending birthday wishes far into the future.
“Those videos are kind of like a modern-day letter to be read after someone dies, but it's not really our role to advise people on the emotional side of their planning," says Kaufman. “However, we do want to make it clear that we don't encourage anyone to articulate wishes in a video that would contradict their written Will. If it's just a sentimental message or an explanation of why they decided on specific legacies, then we have no opinion on that."
Digital Wills are gaining acceptance
One hot topic in many jurisdictions is the debate over what constitutes a Will, says Kaufman.
“For centuries, an essential requirement of a Will is that it be written," she says. “Now there's digital disruption in that definition, too."
In British Columbia, the Wills, Estates and Succession Act includes a provision that Kaufman calls the “vanguard of the digital age."
The provision allows courts to recognize a document as a Will if it has been recorded or stored electronically, can be read by a person and is capable of reproduction in a visible form.
“In Australia, a draft text message was recognized by a court as the last Will and testament of a man who left everything to his brother along with instructions for his cremation," says Kaufman. “The man died by suicide before he sent the text. Afterward, his wife contested the text message, but the judge allowed the Will to go forward."
New companies are beginning to offer services to help people write their own Wills and then upload them to the cloud for storage. Since digital Wills are still new technology, legal challenges to these documents have yet to be fully resolved.
In addition to digital Wills, there are companies that market digital services to consolidate paperwork for estate planning. Guerriero says she doesn't advise people to choose any specific company or method to get organized.
“Just get everything together in one place, keep it safe and tell your executor where to find it," says Guerriero. In spite of living in an increasingly digital world, that message resonates today as much as it did 100 years ago.
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