Digital afterlife, the ghosts of cyberspace

Feb 10, 2021

Your spouse, significant other, child, or someone you love, or even business partner passes away suddenly, the last thing we think of is what will happen to their digital assets, which are more than just Facebook or an Apple iCloud account. The issue is that many of us do not realize how embedded we are in technology and the ramifications of it when we pass away.

Most people have a digital aspect to their life, whether it’s social media profiles, online banking, shopping accounts, travel rewards, documents stored in the cloud with web-based services such as Google Drive or Dropbox, and more often is crypto currencies, such as Bitcoin.

Think about this, how many of us have increased the storage of our Apple iCloud account to store more of our phone photos? Did you know that there is no right of survivorship to those? Once a person passes away, those cherished photo memories of your loved one can be gone forever. What about the documents stored in Dropbox?  Do you know the email password, which is most commonly used in conjunction to other online accounts? It is not unheard of where someone hacked an email account and stole important information. The surviving spouse wouldn’t know until multiple new credit cards, lines of credit were set up in the deceased spouse’s name and bills started coming in months later.

Even money has been digitized through cryptocurrency developments. This digitalization of the world is challenging traditional estate planning techniques, and laws and best practices often lag behind technological advances. If you don’t have the password to access the money, it is as good as gone.

With small businesses, even a brief delay in access to online accounts could be devastating. You want to ensure that as an owner you have a process for tracking websites, social media accounts, media libraries, data, and keeping usernames and passwords safe.

Your digital assets may also include:

  • Cryptocurrencies
  • Email accounts
  • Social media accounts
  • Forums or chat rooms
  • Blogs or websites you own
  • Digital photos, videos and music files
  • E-book or audio books
  • Online gaming accounts
  • Online payment accounts (such as PayPal)
  • Online seller accounts (like Amazon™ or eBay®)
  • Credit card or travel loyalty program rewards
  • Logos, illustrations, artwork or animations you own
  • Digital copyrights, trademarks or patents

Digital assets create a few unique challenges traditional physical assets do not have.

  • Digital assets can be difficult to find online as there is an endless amount of information available.
  • Accessing the assets can be challenging because most assets stored online are protected by a username and password.
  • Ownership rights of online assets are less clearly defined than traditional assets.

Digital assets are important for three main reasons.

  1. There is real monetary value in digital assets. By the end of 2020, the average Canadian will have accumulated $10,000 worth of digital assets, according to a Globe and Mail report, climbing to $50,000 for some wealthier Canadians.  A business, however, has a much higher worth and a company’s value is determined by both its tangible and intangible assets.
  2. Many digital assets present sentimental or lifestyle benefits. Emails between family members or online photos might not have substantial financial value but do have a lot of sentimental value to heirs who would want access to the assets.
  3. Digital assets left alone after death also represent a huge risk due to post-mortem online theft or abuse.

Without explicit instructions, digital assets may be left unclaimed and be vulnerable to hacking.

What, then, should Canadians do? As a minimum, you can create your inventory using a text document, a spreadsheet or an online database. For each asset in your inventory, specify:

  • The type, whether it’s a financial account, social media account, multimedia account, or so on.
  • Where it lives online.
  • The username and password required for access (use a password keeper to record sign-on information if you’re concerned about security).
  • Each account’s estimated financial value, if any.
  • Whom you grant access to, and their rights or responsibilities.

Secondly, check with the different providers and find out what your options are to create a successor or legacy after death. Your Facebook, for example, allows you to name a legacy contact. That person can request the removal of your account after you pass away. But that person can’t sign on to your account and post on your behalf. On Twitter, authorized individuals can request to have your account closed, although they can’t access it directly. 

LinkedIn can close and remove a deceased person’s account, but only after someone verifies your identity and their relationship to you.

Special rules may also apply to digital media accounts. Amazon Kindle™ users, for instance, can share their accounts with authorized users, but the license for e-book files can’t be transferred to someone else if you were the original purchaser. The iTunes terms of service also prohibit transfers. You may be able to give your executor access to close your account, but they wouldn’t be able to copy any music files you bought.

If you’re in doubt about how to create a digital estate plan or what assets to include, ask a financial advisor or estate planning attorney for advice. They can offer guidance on which digital assets belong in your estate plan, the best way to add them to your will, and what obstacles you may encounter.

Consideration of digital assets is now a necessary part of a complete personal and business plan. This is a rapidly evolving area of the law, and one that is increasing in importance each year. But while it can be a complex and challenging issue, it also presents an excellent opportunity to reflect on the things that mean the most in our lives.

About the author

  • Pam is the founder and “boss lady” of Savanti Insurance Agency and Savanti Investment Team (attached to PEAK Securities Inc.). She has over 15 years where she specializes in planning, investments, risk management, and tax-effective strategies for clients’ personal and/or corporate financial needs.

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Although this article was written with the utmost care and based on sources deemed reliable, there is no guarantee of its accuracy or applicability to all specific cases. This article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content and information are of a general nature and does not address the circumstances of any particular individual or entity. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. The opinions expressed in this article do not necessarily reflect those of Peak Securities inc.