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Estate Planning and Digital Assets
Albertans are increasingly creating and storing content online. Almost every estate now includes some form of digital property, so careful consideration must be given to your digital assets when reviewing or drafting your estate documents.
What are Digital Assets?
The term “digital assets” is not specifically defined in Alberta’s estate-related legislation.
In practice, “digital assets” is used broadly to describe electronically stored and accessed property, information, or rights, including:
- Online financial accounts (e.g., online banking, online investments, PayPal, etc.)
- Cryptocurrencies (e.g., Bitcoin)
- Non-fungible tokens (i.e., NFTs)
- Social media accounts (e.g., Instagram, Facebook, LinkedIn, etc.)
- Email accounts (e.g., Gmail, Outlook, etc.)
- Cloud storage
- Stored personal data (e.g., videos or photographs)
- Websites or domain names (e.g., for a business you own)
- Content platforms (e.g., TikTok, YouTube, etc.)
- Loyalty points (e.g., airline miles)
Other terms you may hear when discussing digital assets include “custodian”, “TOSAs”, and “digital wallets”:
- A “custodian” manages the digital keys, passwords, and usernames of a digital asset and can be contacted if access is lost. For example, Google is the digital custodian of a Gmail email account.
- “TOSA” stands for ‘terms of service agreement’, which is often a required step when creating online accounts. TOSAs typically include terms of privacy and use of the account, including the ability for others to access it. Some TOSAs may prohibit you from sharing passwords.
- “Digital wallets” can be used to hold digital assets like photography, writing, cryptocurrency, and NFTs.
Why Should You Think About Digital Assets in Estate Planning?
Many people underestimate the number of digital assets they own. They also may underestimate the value of their digital assets.
If you have online bank accounts (e.g., through EQ Bank or Tangerine), online investment accounts (e.g., through Questrade), cryptocurrency, or NFTs, you likely have digital assets with financial value. You should ensure those assets go to your intended beneficiaries and that any tax-implications are carefully considered.
Alternatively, some of your digital assets may not have financial value (e.g., social media or email accounts), but you may want to preserve or memorialize those assets for sentimental or legacy reasons.
Another important consideration is privacy. Do you want your personal representative (i.e., your executor) having complete access to all your emails and text messages after you die?
If digital assets are not addressed in your Will, Enduring Power of Attorney, and Personal Directives (i.e., the documents that give your chosen attorney and agent the authority to deal with your assets and personal health information while you are alive but incapacitated), legal and practical challenges can arise.
For example, Alberta’s Estate Administration Act requires personal representatives (i.e., executors) to determine the full nature and value of a deceased person’s property, including online accounts, so it is helpful to ensure your Will addresses this topic to decrease frustration and extra costs to your estate after death.
That said, terms of service agreements (TOSAs), availability of logins, passwords, and encryption keys, managing or transferring cryptocurrencies, gaining access to close or memorialize social media accounts, jurisdictional issues regarding location of custodians, and the ability to properly preserve valuable digital records can all pose additional challenges to the person(s) you have appointed.
Recommendations
When reviewing or drafting your estate plan, make an inventory of your digital assets and think about which assets should be transferred, closed, deleted, or memorialized after your death. Review this inventory regularly, particularly as technology evolves.
Consider using a password manager or encrypted system to store recovery keys and ensure a trusted person knows how to access those systems.
Do not tell anyone your actual passwords. Not only might this violate your terms of service agreements (TOSAs), but you must balance security of your digital assets during your lifetime with ease of access after your death or incapacity.
In sum, proper planning ensures your digital assets are protected, yet accessible and managed in accordance with your wishes after death or incapacity, rather than “lost, locked, or litigated.”
If you or someone you know has any questions related to digital assets or needs to begin their estate planning, please reach out to our Wills and Estates Team and we would be happy to assist.
This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.
