The days of rooting through deceased parents’ basements for old photos, videos and heirlooms are fast disappearing.
That’s because older Canadians are becoming more active online. A 2010 Statistics Canada study found 60% of people aged 65 to 74 go online regularly, as well as 29% of those older than 75.
What’s more, boomers are just as likely to own several tech gadgets as younger Canadians, says a 2012 Ipsos Reid survey. They’re storing photos and documents within locked online accounts and password-protected devices—meaning executors will need more than house keys to gain access to the complete legacies of relatives.
Problem is, many online account providers have inflexible privacy guidelines (see “Policies of popular account providers,” below).
Consider PayPal. Though it’s obliged to transfer existing account balances to estates after users die, it won’t do so for those who become incapacitated. If a user wants someone to manage his account, he needs to grant that person power of attorney.
This is a crucial step if your clients are successful sellers on eBay or Amazon, because they may have large account balances. Having power of attorney grants relatives access to funds.
Similar stringent policies apply to non-monetary accounts. Thanks to privacy laws and user policies, relatives or executors must go through the courts if an account owner hasn’t made data-sharing arrangements.
Take a 2004 U.S. case where a father spent a year battling Yahoo over access to his deceased son’s account. The company wouldn’t let him log in to read old emails or view photos. At the time, Yahoo vowed to “uphold the preferences that [were] part of the agreement [it had] with…users regarding…privacy.” Ultimately, a probate court forced Yahoo’s hand and the father won. But despite that outcome, the email provider said it still wouldn’t alter its policies.
Further, the company said that, as of July 15, 2013, relatives or executors only have one year to deal with inactive accounts before an ID is freed up for another user to adopt.
What’s more, digital asset protection “is such an emerging area of estate planning [that] we are really still in the what-if stage,” says Erin Cowling, a Toronto-based lawyer who previously worked at Whaley Estate Litigation.
Nevertheless, disputes about digital assets are likely occuring, she says. She notes mediation is mandatory in estate litigation, and it’s also confidential. Since the resolutions wouldn’t be publicly recorded, solutions to digital asset squabbles aren’t widely known.
Making the case
When starting the estate-planning conversation, bring up the protection and transfer of digital accounts as a new planning frontier, says Marlena Pospiech, private wealth advisor at BMO Harris Private Banking. Offer a list of the accounts and assets clients should think about. These include any that have mo- netary value, like web URLs or PayPal accounts, as well as any with providers offering multiple services where sentimental records may be stored. For instance, Google offers email, file storage and payment solution platforms.
If clients aren’t convinced digital estate planning is crucial, let them know “there’s the risk of identity theft after death if they leave accounts unattended,” notes Pospiech.
That’s because most accounts remain open if providers aren’t alerted of a user’s death. She’s seen cases where people have received emails from dead relatives because abandoned accounts have been breached.
Include an online accounts section in estate planning checklists. Toronto privacy lawyer Anita Fineberg suggests clients document:
- online accounts, along with the user names and IDs for those accounts;
- all mobile devices, compu-ters and flash drives; and
- owned websites.
Next, clients must decide how each account or item should be dealt with after death. Facebook accounts, for instance, can either be memorialized or closed. And clients may have certain emails they only want one person to see.
These details should be included on a consolidated spreadsheet, which clients can update every time they purchase new gadgets or open new online accounts.
Because this spreadsheet will change often, Fineberg suggests keeping the details out of the main will. “Clients don’t want to spend time and money changing their wills, so they can create digital schedules or appendices that are also considered upon death.” The documents are referred to as codicils and are incorporated into wills.
Clients should transfer files from outdated media, such as floppy disks or vhs tapes, to newer media