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The Estate Planner's Ultimate Guide to Digital Assets

Digital assets are now a critical part of every estate plan. Learn what you need to know about digital assets and how to include them in your clients' plans.

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Digital assets are rapidly becoming a major part of most of our estates. Whether these assets hold monetary or sentimental value, their significant presence in our lives means they must be included in estate planning.


Unfortunately, there is no easy solution or one perfect way to document and bequest digital assets. In order to effectively address digital assets, the law needs to change, but that takes time. In the meantime, we must create and uphold best practices as much as possible.


Here is everything you need to know about digital assets so you can provide informed advice for your clients.


What are digital assets?

Digital assets can be summed up as any electronic record you own, licence, or control, including:

  • Email accounts

  • Credit card or other loyalty rewards points

  • Online banking accounts

  • Social media accounts

  • Cloud storage

  • Blogs and other content you write and publish

  • Cryptocurrency and NFTs

  • Subscriptions to online platforms and services


Essentially anything you do online that requires a login, and is created and stored digitally, is a digital asset.


The average person has 100 digital accounts, and that number will continue to grow as we rely more and more on technology. Some digital accounts aren't of much value to estate planners, such as grocery delivery service accounts. Others that hold monetary value, like online banking accounts and investment accounts, are valuable in the estate settlement process.


Why you should (and need) to care about digital assets

Digital assets have become a common part of modern estate planning and estate administration. As the number of digital assets per person grows exponentially, their importance to estate plans grows as well.


In a survey done by STEP (Society of Trust and Estate Practitioners) and CLP (Cloud Legal Project) they found that 90% of respondents (lawyers, trustees/trust officers, accountants, and financial advisors) thought that the demand for advice about digital assets would be increasing in the near future. Even today, questions about online accounts, particularly social media accounts, email accounts, storage services, and cryptocurrency have become increasingly common.


Yellow and white text on a navy rectangle. "History of Digital Assets. Digital assets have evolved and grown in the most unpredictable ways. Here are some important dates and events in the history of digital assets. Money bag emoji. The Stanford Credit Union was the first financial institution to have an online banking website, which launched in 1994. Then, on May 18th, 1995 Wells Fargo became the first bank to offer internet banking to its customers, with other major banks following suit in subsequent years."

Digital assets operate much differently than physical assets. With physical assets such as real estate, investments accounts, bank accounts, etc. there is a centralized body you can contact to find out if someone had assets there. For example you can call financial institutions to find unlisted investment accounts.


Many digital assets, such as cryptocurrency or NFTs, are purposefully decentralized for privacy - making them incredibly secure and inaccessible to anyone who doesn’t have the private key (another term for password). There is no way around it —if you don’t have the key, your assets are lost. If your client wants their digital assets to be passed down after they die, pre-planning is a necessity. Including digital assets in estate planning will reduce stress for yourself, your client, their family members, and loved ones.


Digital assets are also a significant security risk when left undocumented. Our physical presence may dissolve when we pass, but our online presence does not. When a person passes, their digital footprint is not only still active, but also makes the deceased vulnerable to identity theft and fraud. By documenting digital assets, you will not only protect your client’s legacy, but you’ll also know where to watch for strange online activity.


EstateBox CEO and founder Anjali Inman takes a deep dive into digital assets and estate planning in a recent webinar for an Okanagan Embrace Aging Month event:


Challenges of digital assets

Because digital assets are relatively new, we lack legislation and even uniform policies that provide a framework for handling and distributing online assets after death.


Service providers will need to begin offering legacy options; but apart from the major social media platforms (see below), very few have relevant policies for dealing with posthumous accounts. Even for those providers that offer legacy options, getting through to a relevant legacy team member within large organizations can be extremely difficult and time-consuming.


Right now, we don’t really know what should happen to digital assets when their owner passes. Additionally, much of the information out there is conflicting.


This is why it is so important to include digital assets in estate plans.


Until we enact law reform, settling digital assets will probably never be simple or straightforward, but there are ways to mitigate complications.


Documenting your clients’ wishes and including a plan for each digital asset they own provides the best chance of settling their assets in a fair and efficient manner.


Digital assets can no longer be left out of estate planning. Email accounts, social media profiles, online bank accounts and more are just as important to our legacy as traditional assets.


Digital assets and estate planning gone wrong

We are only beginning to see unfortunate examples of digital assets and estate planning going wrong. Here are just a few examples where a digital estate plan could have made a drastic difference in a grieving loved ones’ life.


Carol Anne Noble of Toronto was in a four-year legal battle with Apple to access the account she shared with her late husband, Don. Despite being the executor and sole beneficiary of her husband's estate, she had been unable to access the account where he chronicled his experiences with a rare form of spinal cancer. Shortly after their story was published in a CBC article, Apple reached out to Noble and finalised a deal with her lawyer that allowed her access to her late husband’s account.


In the UK, Rachel Thompsom spent three years and thousands of pounds fighting to access her late husband Matt’s Apple account. Matt died without a will or instructions about how to access the thousands of family photos and hundreds of videos stored in his account.


Yellow and white text on a navy rectangle. "History of Digital Assets. Email emoji. 1996 saw the birth of webmail with Hotmail and RocketMail (later becoming Yahoo!Mail) being the first free webmail services. Finally in 2004 Gmail launched — and is now the most widely used and well-known webmail service in the market. Pizza emoji. Fun Fact: May 22nd is widely recognized (and celebrated) as Bitcoin pizza day! On May 22nd, 2010 the first ever recorded real-world transaction using crypto occurred when 10,000 bitcoin was traded for two large pizzas."

In Germany, a mother was involved in a years-long legal battle with Facebook over accessing her 15-year-old daughter’s after her tragic and sudden death. The parents had her password but upon trying to log in to her account they discovered it had been memorialized (the account and its photos are visible, but no one can log in to make changes or see messages). The Berlin court ruled in the mother’s favour in 2015, however Facebook continued to refuse access. In 2017 Berlin’s highest state court sided with Facebook, until the ruling was annulled in 2018. The back-and-forth rulings in the case shows the volatile nature of digital assets. Even with a username and password, this grieving mother was unable to access her daughter’s account.


Loved ones are also losing digital assets that hold significant monetary value. Monetary digital assets such as cryptocurrency, and NFTs are decentralized, meaning that there is no way to access the assets without a private key. There is no work-around, or organization you can contact to withdraw the deceased's assets. Despite this, monetary digital assets are still rarely included in estate plans. In fact, it is estimated that as much as 40% of the world’s Bitcoin has been lost forever. This happens when someone loses or dies without passing on the private keys that allow Bitcoin to be accessed and spent.


Digital assets and estate planning best practices

Now that we’ve outlined the challenges, volatility, and general uncertainty surrounding digital assets, how should advisors and professionals ensure that their client’s digital assets are taken care of? While we wait for law reform and new policies, there are a few best practices to follow.


Encourage clients to use legacy features on social media

Certain companies have begun to offer legacy options, allowing users to control what happens to their accounts after they pass.


Facebook allows its users to add a legacy contact to manage their page after they pass away. Aside from managing the memorialized account, the legacy contact can also request the account be removed from the site.


Google’s Inactive Account Manager allows its users to decide what happens to their data if their account goes unused for a set amount of time. Users can either select a trusted person to receive their data or have the data deleted.

Yellow and white text on a navy rectangle. "History of Digital Assets. Coin emoji. Digital currency (including cryptocurrency) began in 2009 with Bitcoin - the first decentralised cryptocurrency created by pseudonymous developer Satoshi Nakamato. Shortly after, on March 17th, 2010 Bitcoinmarket went live, becoming the first cryptocurrency exchange. When Bitcoinmarket first went live, you needed 333 Bitcoins to buy a single dollar. Now, a single Bitcoin will run you over $25,000!"

Apple launched a legacy feature called Digital Legacy with its iOS 15 update. The new feature allows users to add trusted contacts who can access their account after they’ve passed away. Trusted contacts will need to make a request before receiving access and will have a time limit set in place before the account is deleted.


Details like payment information will not be available for trusted contacts. The new feature should prevent costly legal battles for people trying to access their loved ones' photos and other files in their iCloud account after they’ve passed away.


LinkedIn offers three options in the event of an account holder’s death:

  1. An authorized person can request to close the account

  2. An authorized person can request to memorialize the account

  3. An unauthorized person can report a member as deceased


An authorized person must provide legal documentation such as a letter of administration, testamentary, or representation issued by a court, or a court order appointing them as an authorized representative for the deceased.


Add a digital asset clause to your clients’ wills

There is no automatic right of survivorship for digital assets. Adding more complexity is the fact that digital accounts and assets are contracts between an individual and a service provider, making it nearly impossible to bequest them to another person without a written statement.


This means that one of the best ways to ensure the right people have legal access to your client’s digital assets is to include a digital asset clause in their will. This clause gives a digital executor power to access, manage, administer, and sell digital assets belonging to the deceased. It ensures that your clients’ assets are safeguarded and passed on according to their wishes.


Have clients document everything

Starting today, encourage your client to document their digital assets and digital property, including where it’s located and how to access it. Document everything and track the value of all monetary digital assets.


It is impossible to know what will be valuable five, ten, or twenty years in the future so documenting only the obviously valuable assets is not enough. They could buy a cryptocurrency worth $10 today that could be worth a million dollars in 20 years.


The importance of digital assets in a well-rounded estate plan can't be overlooked. We hope you'll use this guide to start a conversation with your clients about what digital assets are, why they must be included in their future planning, and the risks of leaving them undocumented.


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While we’re passionate about all things estate planning, we’re not professionals. We recommend speaking with your lawyer or financial advisor when putting together an estate plan. Follow us on LinkedIn, Twitter, Facebook, and Instagram!


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