Why you need a digital estate plan now
Just a few years ago, the idea of a digital estate plan seemed like an issue for the far-off future. Now that’s changed as we hear of those who have passed away with loved ones unable to cancel their social media pages, unlock their online photo libraries, or locate accounts for financial products purchased and managed only in the digital realm. The time to think about our digital estate has come. Here are a few things to consider:
Documents. Our financial “papers” are seldom on paper anymore. Are key documents like your Will stored on your computer? Could your loved ones or your executor find them, or are they hidden behind passwords only you know? Consider having paper back-ups stored in secure places like a home safe or a safety deposit box. If you used a lawyer, make sure they also have a copy of your most recent estate plan and Will.
Accounts and passwords. So much of our financial life now takes place online: online banking, online access to our investment accounts, and more. But also consider the number of financial commitments you have entered into online, everything from your Netflix or Spotify service to software subscriptions to auto club and other memberships. Many of these payments will continue until cancelled or until the method of payment such as a credit card is shut down. A quick glance at your credit card statements may reveal just how many of these contracts you have. Consider maintaining an up-to-date list of your digital commitments.
However, don’t include digital passwords on a list for the benefit of your executor. That exposes you to risk now and liability if you suffer a breach of security as you will have failed to adequately secure your passwords as most agreements require you to.
Digital assets. One of the most shocking cases of the loss of digital assets happened in early 2019 after Gerald Cotten, the 30-year-old CEO of Quadriga, Canada’s biggest cryptocurrency exchange, died while traveling in India. His sudden death left the company unable to gain access to $145 million of Bitcoin and other digital assets.
While Bitcoin ownership is limited to less than 5% of Canadians, almost all of us have digital assets of some kind. For instance, about 90% of Canadians have a loyalty program card and, on average, have four loyalty cards in their wallet.1 Some of us have the equivalent of hundreds or thousands of dollars’ worth of points. What happens to them if we die? Some programs allow for a transfer of points value; others do not.
Increasingly, expensive assets like seasons tickets to big league sports teams exist only within a digital app behind a password that only you know. Online photo libraries, with thousands of personal memories, are another digital asset that’s easy to forget about. Again, the key here is to document the existence of these assets while protecting your identity and security.
Social media. With some social media sites, such as Facebook, you can take action now, choosing a permanent deletion of your account when you die or the continuation of a “legacy” page which stays active as a memorial. Create an inventory of your social media accounts, alter the settings now if applicable, and leave instructions for your executor as to your wishes.
Digital estate planning is a new and evolving area — and estate law has trouble keeping pace with our ever-evolving digital lives. As with all estate matters, follow these golden rules: don’t procrastinate, document your assets, communicate your wishes and make sure the right people can find the information when they need to.
1 “Reward programs are shifting — here’s what Canadians need to know”, The Globe and Mail, March 21, 2018.