Category Archives: Digital Assets

Dealing with digital property after death

Dealing with digital property after death can cause more grief.

Problems in dealing with digital property after the death of a loved are more common given the digital age we live in.

Such problems may also come with financial consequences. Indeed, if  McAfee the internet security company is correct, digital property may well be worth more than a car for the average Canadian ! A 2013 McAfee survey estimated the average Canadian owned some $32,000 in digital assets including movies, music, games, digital photos, communications and social media profiles and blogs. (They estimated the global average to be  $35,000 in digital assets.) Many of these digital assets come with complicated terms of service agreements which can be frustrating or impossible for loved ones to access. Depending on where you live, such agreements might even put loved ones in legal trouble based on anti-hacking or privacy statutes after their loved ones die.

The real problem is that people do die  (!) 

Estimates are that as many as 10,275 Facebook users and 5.700 iTunes owners die each day so dealing with those users’ digital property is an issue. The recent story of a widow in Victoria trying to access games on her deceased husband’s iPad highlights the problem. Shortly after Peggy Bush’s husband died , the 72-year-old, tried to play games her husband had purchased before his death.  Nothing short of a court order was good enough to be able to access those iTunes games including a death certificate or the will until CBC Go Public stepped in and Apple stepped up.

As the article points out, digital property is unique from other property owned by a loved one. While users of digital property own the material online for the most part, access to it is controlled by  providers like Apple. Providers set the rules when it comes to accessing what we put online and the content purchased. One solution is that providers should offer clearer, “plain speak”  policies dealing with digital property and access. The last time I checked, the I Tunes terms and conditions were some 28 pages long. I doubt even lawyers read them when setting up their I Tunes account.

Canadian laws need to be more clear about who owns or controls what is put online after someone dies. In the US, the Uniform Fiduciary Access to Digital Assets Act will hopefully solve the problem for Americans using the concept of “media neutrality“. Such legislation would give the account holder the power to decide what happens to his or her digital assets in the same way they do for physical or financial assets. Delaware was the first state to take the lead and enact such legislation but many other states have introduced such legislation for consideration. While I’m an accountant not a lawyer, I’m not aware of any such legislation being contemplated.

What steps can be taken to secure your digital property for your loved ones? 

There are a few key to do’s to safeguarding digital property  that I can suggest when it comes to digital assets or property:

Plan Ahead – make a list of important passwords and online accounts and specify what should be done with each of those accounts if you were to become incapacitated or die

Keep your list up to date regularly review your list for any changes (and additions) you have made

Store and share – store your list in a secure location and let family members/executors know how to access that list. Don’t make the mistake of listing all your online accounts and passwords in your will or power of attorney as they can’t be guaranteed to remain secure

Backup – ensure you back up your digital assets if they are stored online; backup data to a local computer or a USB or similar storage device on a regular basis.

Estate planning – work with an estate lawyer to update your wills and powers of attorney to include digital property. Given that only 56% of Canadians have a will – make a will if you don’t have one. Specify your wishes about what happens to your digital assets after death and provide consent /authorizations so that your loved ones/executors can deal with them appropriately. This would include password resets or recoveries.

LegacyTracker can help provide protection for your digital assets by providing a secure spot for you to safely store your online usernames and passwords. LegacyTracker also enables secure  sharing of your important information with loved ones, advisors or executors.

 

Bitcoin - a headache for Estate Planners

Bitcoin – Virtual currency & new headache for estate planning

As if dealing with digital assets from an estate planning perspective was not difficult enough…now there is Bitcoin.

Bitcoin and other virtual currencies are creating  interesting and unique challenges for Estate lawyers and owners who are giving consideration to their estate plans (not to mention the future challenges for those that are not)

Fortunately, bitcoin was given due consideration in the new Fiduciary Access to Digital Assets Act (FADAA) which specifies that `digital assets include digital currency and similar products currently in existence and yet to be invented. This Act is good news if you live in the US and your State takes the opportunity to use the Uniform Act as their legislation. The Act allows a representative or fiduciary to deal with digital assets in a similar way as they would for financial or physical assets. It shields those representatives from any inadvertent liability. Thus far there is no such progress on such legislation in Canada as far as we know.

As for some of the other issues surrounding Bitcoin, there`s a good summary from Bloomberg BNA which you can find here or as a download here: Bitcoin is creating new headaches for Estate Planners as a download

 

Estate Planning for Digital Assets

UFADAA makes estate planning for digital assets a little easier

Thanks to the Uniform Law Commission, (an US National Non profit/Non partisan organization that supplies “ready to go” legislation) comprehensive provisions are now available relating to Digital Assets.  That should help make estate planning for digital assets a little easier going forward if it’s utilized by individuals US states.

The Uniform Fiduciary Access to Digital Assets Act (UFADAA) makes legislating digital inheritances easier and can alleviate the burden and the heartbreak that can come when families are unable to access simple things like digital photos or messages from loved ones that have passed away. The purpose of UFADAA is to vest fiduciaries (executors, guardians, agents powers of attorneys etc.) with the authority to access, control, or copy digital assets, while respecting the privacy and intent of the account holder.

The Uniform Fiduciary Access to Digital Assets Act solves the problem using the concept of “media neutrality.”  If a fiduciary would have access to a tangible asset, that fiduciary will also have access to a similar type of digital asset.  

The State of Delaware has taken the lead already and became the first US State to enact such legislation by enacting the Fiduciary Access to Digital Assets and Digital Accounts Act this past week. It gives the account holder the power to decide what happens to his or her digital assets in the same way they do for physical or financial assets. At present, that power lies with the tech and media companies in control of the assets. 

There is hope that all 50 states will adopt the Uniform Fiduciary Access to Digital Assets Act so that access to content will be honoured in the way that the user would wish. The Act can be referenced here :  UFADAA-7-17-2014

In the meantime, Google does provide a tool to help users deal with the problem which they have called Inactive Account Manager . You can also keep up to date with any progress or changes by way of a blog we discovered authored by well-known US estate planning lawyer James D. Lamm. His blog is called digitalpassing.com

Unfortunately, it seems there is no such update on What Canada is doing on this subject (Sorry).

Digital Assets – in Life and in Death

In our increasingly digital world, digital assets are adding up…the average digital user (like you) has an estimated $35,000 in digital assets 

Digital assets include purchased movies, music, games, digital photos, communications and social media profiles including blogs like this. Many of these digital accounts can be subject to complicated terms of service agreements, which can make it frustrating or impossible for  loved ones to access. Depending on where you live, such terms of service agreements might even put loved ones in legal trouble related to anti-hacking or privacy statutes, if they try to log on to your accounts after you die.

 

Estate Plans for Digital Assets are becoming more critical 

That’s why it’s important to include detailed directions and information about your digital assets into your estate plan and save those instructions somewhere safe (LegacyTracker provides a spot for that)

An estimated 30M Facebook users died in the first 8 years of Facebook alone 

A good visual guide about what happens to your social media profiles after death comes by way of Dan Shaffer at WebpageFX

The world is changing and this guide is not a definitive answer in all cases. Clearly, Different Sites / Different Rules / Different Data & Different Documentation is accumulated & required after death of you or a loved one.

Here’s some more Facebook Trivia:  with 1 billion users already using Facebook, in the unlikely event that growth stopped on Facebook completely, it’s estimated that the number of deceased users would outnumber those living by 2065. If Facebook continues to grow and memorialized accounts are never removed, then deceased users will exceed living users by 2130.

LegacyTracker can help you organize & safeguard important information about your digital assets -in life and death 

Digital Assets and Death

 

 

 

 

 

 

 

 

 

Are your digital Assets worth more than your car?

It’s certainly possible…

The most recent survey results from McAfee (yes the Internet Security Organization) perhaps should be of no surprise in that our use of technology and our accumulation of all things digital is on the rise. …in a Big way. But the estimated value as of the 2013 survey may yet astound you; The average total value of our digital files in Canada is now estimated to be $32K. (The average of all countries surveyed basis is $35K )

Digital assets ? They include assets like:

  • Personal photos, videos
  • Personal records including health information, financial records, career information, personal projects/hobbies, email accounts etc.
  • Entertainment files including music, TV shows, e-books, video games, apps etc
  • Business Information which could include financial statements, customer data, accounting or payroll detail, domain names, websites, blogs,
  • Social Media sites & Personal Blogs

 How did the estimated value of our Digital Property get so high ? 

  • 88% of consumers own multiple digital devices
  • 62% of consumers own 3 or more digital devices
  • 20% of consumers own 5 or more digital devices
  • 51% of consumers spend 15 hours or more on their digital devices for personal use  each week.
  • Canadians store some 2,584 digital files on average on at least one digital device
  • 51% of the digital assets held by consumers were considered to be impossible to retrieve if lost or not backed up properly
  • 77% of Canadian consumers listed identity theft and fraud as top security concerns but 17% of those consumers do not have comprehensive security software in place on all of their digital devices (14% globally)

Security software and backup procedures are critical and should be worth the cost by now for Canadians, which the survey also notes is the primary reason given by those who don’t have any security software in place

LegacyTracker will not be able to recover your digital assets should they be compromised by a virus or security issue but it does provide protection in the way of allowing you to safely store your online Usernames & Passwords alongside instructions about your Digital Assets

Digital Estate Planning is Important …

Technology in most cases advances more quickly than law and that’s certainly the case with regards to digital asset protection and Digital Estate Plans. In the not to distant future or for some of us now, we could envision that Digital Executors will have to be considered to handle digital assets specific and separately from other assets. But at minimum today, it’s important to at least give reasonable consideration & recognition to your Digital Assets because No standard laws exist regarding digital property rights. And more unfortunately,  online service providers offer varying rules about your rights and about sharing access with another user regardless of the circumstance.

User agreements for digital accounts often will sometimes prohibit users from sharing access with another user no matter if it’s a family member, a business partner or an heir. Sad stories are in great supply about family members who can’t access or take down social media accounts of their loved ones who have passed away. it’s important to give consideration to not just providing an inventory that identifies your digital assets but also access information and some form of written permission or authorization for that access & specific instructions as to your wishes for dealing with your digital assets after your death. It’s a recent but fast growing area of concern that you should seek legal advice about.

 

 

 

 

What are your digital assets worth?

McAfee the online security organization has commissioned a few surveys over the years that show the growing value of digital assets. Their research in 2011 (provided by MSI International) surveyed more than 3,000 consumers across 10 countries and shows varying values of digital assets.

mcafee-unprotected-digital-assets

Digital Assets? They include music and video downloads, software programs, photos, career info, personal records, email etc.

Canadians estimated their digital assets on average to be worth $47,074 which is slightly behind Americans ($54,722) and ahead of the UK ($38,360). McAfee’s study also suggested that it would take an average of some 82 hours for most of us to restore our digital assets if lost. That would be the estimate if we were alive. If we are not alive…it’s anyone’s guess if they could be restored at all. Digital assets/Digital passwords need to be backed up and shared somewhere safe

In 2013, they released a new survey specific to Canadian consumers’ attitudes towards online surfing, web security and data protection.  This survey showed Canadians placing a value of $32,000 on the digital assets stored on their devices (not sure why the decrease from the earlier study) This study showed that most of us are not taking appropriate precautions to back up and safeguard our digital assets.

Protecting online assets needs to be made more of a priority for our families and that will come from education and having a good handle on secure technology.

mcafee-digital-assets-canadMcAfee Cares is an Online Safety for Kids program which hopes to train school aged children and adults on ways to stay safe, secure and maintain good ethics in online behaviour.  You can learn more about their program here http://mcafee.com/onlinesafety.

LegacyTracker has made provisions for safeguarding your digital assets

Your Growing Digital Estate-Why we worry

This is a good article from the Student Lawyer website  The choice for aspiring lawyers (& us)

Digital Estate Planning: Is Google Your Next Estate Planner? 

This article picks up on a discussion with Jamie Hopkins who is Assistant Professor of Taxation at New York Life Center for Retirement Income about the challenges facing traditional estate planning in relation to the disposition of digital electronic assets

Google your estate planner

…”the unique nature of digital assets, coupled with the fact that many digital assets will long outlive their owners, presents new challenges to traditional estate planning techniques…”

While many people do not have an estate plan in place for the disposition of their traditional assets, even fewer have a specifically designed digital estate plan to manage their digital assets upon death. By the end of 2012, almost 30 million Facebook accounts had outlived their owners, but only three million had been memorialised [4] for their deceased owners. This leaves millions of photographs, private messages, and other digital assets stored on the deceased’s Facebook account, which is inaccessible to his or her family and friends.[5] These forgotten pages become a virtual shrine, creating ‘a pixilated Dorian Gray, colored by iPhone photos, ‘pokes’, and ‘LOLs’ — possibly for an eternity.’[6] As such, the unique nature of digital assets, coupled with the fact that many digital assets will long outlive their owners, present new challenges to traditional estate planning techniques, requiring more complex planning techniques than previously used for the disposition and management of traditional estates.

What will happen if you or one of your loved ones sets up all of their accounts online but the access information is not shared? A family already grieving is subject to even further distress. The last thing you or your family need is a time of grief is the frustration and potential financial loss because proper digital estate planning was not considered especially in light of the fact that there are unique issues that plague digital assets like ownership and transferability.

LegacyTracker does provice for digital estate planning