Digital Assets and Estate Planning

Introduction

Statistically, 1 in 7 people on earth have Facebook account.  But how many estate plans contain provisions dealing with online assets. 

Online identities, servers and social media profiles are extremely important assets.  They are used to store information, documents, photos, books or other purchases.   They are used to participate in banking, commerce, auctions and other transactions. 

On death, each of these online assets can create issues for estate trustees and Wills should be updated to include special powers to deal with these issues.

Types of Online Accounts

Control of the social media identity of a deceased person may be an extremely sentimental and often contentious issue, particularly in the case of the younger generation.  This is where friends, family and strangers (possibly the media) look for information and to post condolences.  These sites are also logical places to maintain memorial identities for the future.   Social media profiles can automatically delete if inactive for periods of time or they may continue indefinitely if not cancelled.

Many documents, information, communications, photos and videos can be stored online.  These can include email accounts, texts, Twitter accounts and blogs.  These types of accounts can have sentimental and social value and raise privacy issues.  They may also contain valuable and copyright materials.

Online commercial activities including online retailing (eg. Purchases or sales through EBay or Etsy) and receiving digital payments (eg. PayPal or Bitcoin) can raise both obligations and entitlements.

Estate Trustee Issues

The Estate Trustee should be named as successor on all online accounts and assets.  The Estate Trustee should have the power to take control of the assets.  The Estate Trustee will need the power to deal with the service provider.

Once control is established the Estate Trustee will often have three options:

• Close the account and “take down” the posted information or have such information no longer accessible to the public.
• Continue or modify a site, such as a social media site to protect and preserve the memory of the deceased.  A Facebook profile can become an excellent memorial site to which many friends and family are already connected.
• Transfer the account to a designated or other appropriate person.

 Social Media or Financial Assets

An Estate Plan should specify different treatment of social media sites and financial assets.

Social media sites will tend to involve more memorial consideration and may have no financial value but have considerable sentimental value.  These assets could be specified in the Will to pass to a designated individual or may be transferred by the Estate Trustee to family without consideration of other estate planning concerns.  Unless specifically addressed in a Will, control of social media could become a contentious issue which triggers deeper estate disputes.

Financial assets including copyright issues should be handled in a manner consistent with other provisions of the Will and these assets could be specified in a Will to pass to a particular individual.

Limitations

Online accounts are often subject to service agreements and contractual limitations.  Most people simply click “Agree” without (reading or) understanding the contract which may include provisions affecting ownership, copyright, privacy issues or which may grant rights to use their information to a corporation (about which they know little or nothing).

There are also many innocuous contractual provisions which could be relevant, for example an account can be de-activated after a period of inactivity.  Alternatively an “identity” could continue and be “hijacked” by someone else.

At present not much thought has been given to the estate planning issues arising from the digital world. This is likely to become a more important in the future.

The “Google Will”

Also known as the “Inactive Account Manager”.  Google has initiated a setting which allows you to delete all information from your account if inactive for a period of time or alternatively to designate someone else to take control of the account.

This is an excellent forward-thinking move by Google which hopefully will catch on with other sites.

Conclusion

We also encourage clients to consider digital and online assets in their estate planning and to update their Wills accordingly.

Prepared by Ismail Barmania of Barmania-Lawyers.

Ismail can be reached at (416) 777-4016