Digital Asset Protection in BC

Digital Asset Protection Law

In British Columbia, like almost everywhere on the planet, our lives are now conducted increasingly online. Accordingly, most people have accumulated digital assets in one way or another. These may be large or small, from e-commerce stores to cryptocurrency holdings, social media platforms, music subscriptions and even online bank account access. However, when we come to estate planning, many still tend to take a traditional approach that does not fully consider these assets.

A comprehensive estate plan takes into account digital assets as well as real-world “brick and mortar” assets. The team at Vest Estate Law are ready to help you plan and execute a modern estate plan that considers all of your interests.

What are digital assets?

Digital assets are generally considered to be:

• Files stored on digital devices such as computers, laptops, tablets, storage devices, smartphones, etc.
• Emails, digital media (music/photos/videos), software licenses, social media platforms (e.g., Facebook, Instagram), online access to bank and financial accounts, domain names and websites (including online stores) as well as e-subscriptions, air miles, digital rewards programs, and so on.

Access to these files that we take for granted in life can be complex for loved ones, attorneys, and personal representatives after you die or become incapacitated – unless you have considered and put in place some digital asset planning.

What are the main considerations with digital estate planning?

Digital estate planning requires consideration of all your digital assets and the granting of powers to access them when you are incapacitated or deceased. Most of us accumulate considerable digital assets over a lifetime, and these assets are subject to strict privacy and data protection laws.

Your estate plan, therefore, needs to organize, protect, manage, and pass these assets on responsibly to the intended beneficiaries. You may already know about power of attorney agreements, which can appoint an attorney to manage financial affairs when a person (the “donor”) loses mental capacity. Likewise, a personal representative is appointed through a will to manage affairs after death.

These estate planning documents can provide instructions for digital assets – granting access to attorneys and personal representatives to manage and dispose of them according to your wishes. Like with all assets, unless the transfer is preplanned and clearly stated, complications and delays for family members can arise after death. Fraud and identity theft are also more likely if there are delays in accessing the digital assets of a deceased person.

There is no legislation currently that deals with the disposal of digital assets specifically. It is best to speak to the team at Vest Estate Law about your needs in this regard. We can include the relevant clauses and specifications when drawing up your will or power of attorney, considering the following key elements:

• Designating appropriate powers – personal representatives and “attorneys” need to be granted the specific and appropriate powers to access, manage, and distribute digital assets to beneficiaries.
• Inserting relevant definitions and clauses – all estate planning documents dealing with digital assets need to define what assets they refer to, and relevant clauses should be inserted wherever necessary to address these assets specifically.
• Creating an inventory of digital assets – attorneys and personal representatives should have access to an inventory of digital assets, detailing each asset, the usernames/passwords/PINs, answers to security questions, and instructions on how they should be managed in the event of incapacity or death.
• Review of digital assets – for ease of access and disposal of assets, a review of your digital assets should be conducted that takes into account ownership rights, terms of use for service providers, and privacy laws.

Disposing of digital assets upon death in British Columbia

You may think that a son, daughter, or spouse can legally take ownership of your Facebook account when you pass away – but this is not the case. Not all assets can be passed on legally – even with careful estate planning.

Social media platforms are just one example of unnecessary complications. Digital assets can involve much higher stakes, and it is best to plan for the smooth disposal of assets after you pass away. Even a personal representative, as appointed in a will, has limited legal authority to access a deceased person’s digital assets.

Estate planning documents must document your intentions clearly and provide the necessary permissions for your representative to dispose of assets according to these intentions. The responsibilities of your personal representative may include:

• Distributing digital property, and
• Following instructions about what to do with digital files and online account subscriptions

Your representative will need to create an inventory of the digital footprint and devise a plan to locate, access, manage, and transfer/delete them according to your wishes. The process can be complicated if, for example, you want a digital device to be passed on to one beneficiary but the digital information it contains regarding assets passed on to another beneficiary.

Can all digital assets pass through your will in British Columbia?

Some but not all digital assets are considered part of your estate when you die. Any digital asset that you own, of monetary or sentimental value, and that is transferrable, will pass through your will according to your wishes.

Typically, this includes:

• Cryptocurrency
• PayPal account funds
• Funds owed to you by an online store like Amazon
• Digital music/photos that you own
• Most assets from rewards programs

What digital assets are NOT considered part of your estate?

You do not have the legal right to transfer digital assets such as:

• Email and social media accounts
• Subscription accounts (Netflix, Spotify, etc.)
• Non-transferrable domain names
• Apps on your mobile device (and the data they contain)

You agreed to this in the terms and conditions when you opened these accounts. Therefore, they cannot be included as transferrable assets in your will.

Digital Asset Planning

Because the laws involving access and disposal of digital assets are nascent and evolving, it is best to get legal assistance on digital asset planning. Creating a power of attorney and will that enable precisely what you need can be challenging in this respect.

The experts at Vest Estate Law can help you design a comprehensive estate plan that includes digital asset planning. Start with a one-on-one consultation, during which we will listen to your goals and advise you of your options.