I recently had a meeting with a Tax & Estate specialist who spoke about Digital Assets, and the importance of covering these assets through your Will (and Powers of Attorney). Even 5-10 years ago, these assets were not of much value, and certainly were never thought to be included in your estate plan.
So, What are Digital Assets?
Digital Assets are essentially your financial footprint in the online world. Do you collect grocery points, airline rewards, credit card rewards, gas station points? It might seem silly, but there have been studies that have found by the year 2020 (not so far off), the average Canadian might have $10,000 worth of digital assets. Not too shabby for all those cards that take up room in your wallet, eh?
The problem with these assets is that typically, a digital account is used to access these digital assets. What this means is that if/when you die, your executor tries to reach out to these companies to claim the value for your estate (if they even know they exist in the first place), and the company says “sorry, you don’t have access to their account digitally, too bad”. You sign the Terms & Conditions without so much as reading the first two words when you open these digital accounts, and unfortunately most stonewall any type of estate representative from gaining access once you’re gone without any indication in your formal Will.
The other sensitive asset is your personal information and likely, photographs. Do you want your personal messages, photos, emails, etc., accessible on the internet forever and ever? Someone needs to have authority to remove these things and your accounts from the internet.
Here’s what you can do to ensure your estate plan includes these growing digital assets:
1. Identify the assets by creating an inventory list of all digital assets and update it on a regular basis.
2. Appoint a trustee who is specifically authorized to manage your digital assets. This can be the same person you appoint as executor, or another person who is solely responsible for only managing your digital assets.
3. Give access by creating a password protected list of digital assets, and ensure this is accessible to the trustee you appoint.
4. Ensure you have detailed instructions in your estate plan as to how you wish these assets to be distributed amongst heirs.