Estate Planning and the Digital Frontier
Our world is undeniably digital. People now spend an average of seven hours a day online, essentially dedicating nearly a third of their lives to the internet. This growing dependence has led to an explosion of digital assets: emails, online investment platforms, cryptocurrency holdings, social media accounts, AI tool accounts, software licenses, digital media, and files stored in online storage.
As the prevalence of digital assets grows, so does the need for proactive estate planning. Without it, accessing or controlling these assets after someone’s death can become complicated. These assets often hold significant value, yet are frequently overlooked in wills, potentially leading to disputes and costly legal battles.
Moreover, the absence of defined administrators and beneficiaries can expose digital assets to identity fraud, theft, or other illegal activities.
The Legal Landscape in Canada
Canadian law concerning digital assets in estate administration is fragmented. Very few provinces have specific laws addressing digital assets. Alberta’s Estate Administration Act provides executors with access to online accounts to identify assets and debts, granting them legal authority over digital assets. However, online service agreements can restrict third-party access, hindering executors. Saskatchewan, in contrast, has the Fiduciaries Access to Digital Information Act, which grants executors automatic access to digital assets unless the will specifies otherwise.
Types of Digital Assets and Their Significance
- Digital Assets with Financial Value: Running online businesses, managing investment portfolios, owning cryptocurrency, participating in loyalty programs, and earning income from digital platforms all represent digital assets with financial implications for the deceased and their beneficiaries. Comprehensive digital asset planning is increasingly critical as more financial assets become virtual.
- Digital Assets with Sentimental or Privacy Value: Social media accounts, emails, and media stored in online systems (like iCloud), while lacking monetary value, often hold considerable sentimental value, such as family photos and videos. These need to be addressed.
- Artificial Intelligence: The rise of AI tools like ChatGPT raises new concerns. Access to an AI account can provide a detailed record of search history and potentially expose sensitive personal information. Testators have to plan for who will manage their accounts. AI regulation is currently undefined, presenting a regulatory vacuum.
Recommendations for Effective Digital Estate Planning
When preparing a will, it’s vital to consult an estate planner. They can help create an inventory of your digital assets, including detailed instructions on their post-mortem management. This inventory should be regularly updated.
The will should grant personal representatives explicit authority to access, manage, and distribute digital assets. The testator’s instructions regarding digital assets must be clear to facilitate approvals from online service providers.
Conclusion
As our digital footprint expands, planning for the management of digital assets upon death or incapacitation is crucial. Including digital assets in your estate planning is essential to provide comprehensive, modern protection. While the law is slowly adapting, addressing these concerns now can prevent financial and emotional estate disputes in the future.
Disclaimer: This article is intended as a general guide and doesn’t provide specialist advice. Consult with a professional for personalized guidance.
