What are digital assets and why is it important to consider them in estate planning?

When we think about estate planning it is natural to consider what we want to happen to our homes, money, and children when we are gone. It is less common to consider what we want to happen to our digital assets. However, the importance of planning our digital legacies continues to increase as we accumulate more and more digital assets.

The term “digital asset” refers to any content a person owns in digital form. Examples of digital assets include accounts such as Facebook, Instagram and email; photos; entertainment files such as music, TV shows, games, eBooks and apps; financial records; and point reward programs such as Air Miles and Aeroplan.

A 2013 survey conducted by McAfee found that globally almost 90 per cent of us own multiple digital devices, with more than half spending at least 15 hours every week using a digital device for personal use. The same survey found that on average we have over $35,000 US (currently equivalent to $48,000 CAD) worth of digital assets stored on our digital devices.

Accessing digital assets can be challenging, or even impossible for executors and beneficiaries who are left without passwords to their loved ones’ digital accounts. For example, last year Apple demanded that a widow in British Columbia obtain a court order to gain access to her late husband’s Apple ID password. However, ensuring up-to-date usernames and passwords are securely stored for your executors and beneficiaries to receive after your death is not a simple task. Including your login information in the will itself exposes you to the risk of having your passwords made public if your will is probated and becomes a public document.

Even where passwords have been provided, there may be repercussions both practical and legal when executors and beneficiaries access a deceased person’s digital accounts, especially where the deceased person did not set out a plan for their digital assets. An executor or beneficiary who receives passwords for a deceased person’s digital accounts without instructions may discover personal information about the deceased that the deceased had no intention of the executor or beneficiary discovering. Furthermore, accessing a deceased person’s digital accounts may be inhibited by legislation including the Criminal Code, the Privacy Act, and the Personal Information Protection and Electronic Documents Act.

In Canada, we currently do not have laws dealing with the handling of digital assets by executors and beneficiaries. Therefore, if a person does not provide instructions for dealing with their digital assets in their will, there is no legislation to step in and set out how their digital assets should be handled like the Intestate Succession Act does for most other real and personal property.

For example, you may or may not want your Facebook account to be deleted after your death. As the law stands, if you do not express your preference in your will, there is no legal presumption that your failure to state your intention indicates that you intended for the account to be deleted or not to be deleted. While initially this may seem frivolous, many Facebook accounts contain irreplaceable assets such as family photos that may not have been stored elsewhere. This can result in additional confusion or conflicts amongst your survivors.

Many digital service providers have their own testamentary policies dealing with the disposition of digital assets after death. These policies can vary greatly, and some digital service providers don’t have one at all. For example, Facebook’s policy is to secure and memorialize profiles after Facebook is made aware that the person has died, and a profile may be deleted at the request of an immediate family member. Facebook will not provide the deceased’s login information to anyone under any circumstance. Facebook users do have the option to designate a “legacy contact”. A legacy contact can pin a final post on the deceased person’s Timeline, respond to new friend requests and update the account’s profile picture. A legacy contact cannot post as the account holder or view their messages. Meanwhile, Apple’s terms and conditions are silent regarding what happens to the account on the death of the account holder.

In 2016, the Uniform Law Commission adopted the Uniform Access to Digital Assets by Fiduciaries Act as model legislation. The stated goal of the model legislation is to facilitate fiduciary access to digital assets while respecting the privacy and intentions of the account holder. Nevertheless, until some form of legislation is enacted, access to digital assets by executors and beneficiaries will continue to be managed solely by estate planning and the varying testamentary policies of digital service providers.

Sampson McPhee has prepared this publication to provide legal information of a general nature. It is not intended to provide legal advice. If you have any questions or concerns about estate planning and digital assets, one of our lawyers will be happy to assist you. You can reach us by calling 902 539 2425.