Digital assets may exist in a virtual world, but they are real in terms of their value. Our digital assets are growing at an exponential rate, and are an increasingly meaningful part of our wealth. As a result, they’re becoming an important part of our estate planning.

Measuring your digital footprint (it’s likely bigger than you think!)

With the average Canadian signed up to more than 100 online sites, it’s easy to underestimate your digital footprint. It helps to understand that digital assets are more than just virtual stores of monetary value, like reward program points or cryptocurrencies. In fact, they are any record that is stored in a digital form, including photographs, videos, messages, emails, work products, intellectual property and, of course, social media accounts.

Access granted – assessing your digital state of affairs

Despite their relative newness, it is important to remember that your digital assets must be managed by your executor as part of your estate. To help them do so, and to ensure that your beneficiaries don’t miss out on these important assets, here are a few key steps you can take:

Step 1: Take inventory

Create a full list of all of your digital assets, and note:

• The type of asset it is;
• Its potential or real value (e.g., sentimental, business, monetary);
• The location on the web and/or your digital storage sites.

Also consider deleting old or unused accounts and sites to make life easier for your executor.

Step 2: Ensure access

It’s important to ensure that your executor and beneficiaries can gain access to your digital assets. Make note of:

• The custodian of any digital assets, such as a social media or cloud-based storage company, through which access to an account or asset may have to be arranged;
• Note account names and devices, and the passwords to access them;
• Ensure you securely store account names and device and account passwords in a safe place, and inform your executor where to find them;
• Determine and note whether you may pass along account access to a third party without violating any terms of use as issued by the custodian of the asset, for example a bank or certain social media sites.

Step 3: Consider all aspects of your estate and plan accordingly

• In your Will, provide clear directions to your executor and/or beneficiary around how you wish to transfer or dispose of each digital asset;
• Any digital assets having financial value (e.g., cryptocurrency, domain names, loyalty program rewards) should be evaluated and considered within the context of the overall value – real and digital – of your estate, and properly proportioned to beneficiaries to avoid unintended over or under allocation to one beneficiary over another.

As our digital world expands, so does our digital footprint and the assets we leave behind in it. Talk to us about how we can help with your estate planning needs.

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