My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant and a partner with a National Accounting Firm in Toronto. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. The views and opinions expressed in this blog are written solely in my personal capacity and cannot be attributed to the accounting firm with which I am affiliated. My posts are blunt, opinionated and even have a twist of humor/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, June 17, 2013

New Will Provisions for the 21st Century – Your Digital Life from Facebook to Domain Names

Today I have a guest post by Katy Basi on digital assets and how they need to be considered and reflected in your will. This is the second post in a three part series by Katy. Previously, I posted Katy’s blog on New Will Provisions for the 21st Century –RESPs which dealt with RESP issues that one must consider when drafting a will. Katy’s final installment on Reproductive Materials will be posted sometime in the fall.

So without further ado, here is Katy’s very interesting post that considers everything from your Facebook page to any domain names you own. My only question is, does Katy think any guy has even seen the Princess Bride?


New Will Provisions for the 21st Century – Your Digital Life

By Katy Basi

The treatment of “digital assets” upon death is a hot topic. First it’s important to define what we mean by the term – basically anything remotely relating to a computer may be pulled into this category. One very interesting paper on the topic divided digital assets into five categories: devices and data, e-mail, on-line accounts, financial accounts and on-line businesses. (If you’re interested, check out this paper by Kristina Sherry titled “What Happens to Our Facebook Accounts When we Die?: Probate Versus Policy and the Fate of Social-Media Assets Postmortem”).  

Since I draft wills and help executors administer estates, my main concern is with the difficulties that digital assets cause for executors and whether or not I can add provisions to a will to smooth out these issues before they occur – preventative planning, so to speak. As of the time of writing, there is no legislation in Canada addressing digital assets, but some forward-thinking US states have implemented new laws.

At a minimum, I recommend that your will and power of attorney for property have provisions clarifying that your executor/attorney for property has the legal authority to deal with your digital life. For example, wills drafted by yours truly contain the following provision:

My executor shall be given access to, and may take control of, conduct, continue and/or terminate any and all of my digital assets, including domain names, devices, data, on-line accounts, whether financial or otherwise, on-line businesses, unpublished photographs, manuscripts, and intellectual property of any kind whatsoever stored digitally, property within any video game or virtual world, and any of my accounts on any social networking website, microblogging or short message service website (e.g. Twitter), or email service website.

My hope is that this clause may help executors in their dealings with various on-line service providers. However, many of the providers take the position that they had a contractual relationship with the deceased, and therefore the terms of the contract govern (which are generally available in the form of policies). 

For example, Facebook’s policy is to memorialize a person’s timeline once they have been notified of the death. Only immediate family members and the executor can require Facebook to remove the account of the deceased. Twitter has a similar policy. If you come across the profile of a deceased person on LinkedIn, you can fill out an online form informing LinkedIn of the death and they will “be in contact with you”. Google’s “Inactive Account Manager” was introduced in the US in April.

Depending on the option you select, this feature sends information about your Google accounts to your designated person if your account has been inactive for a certain period of time, or it may just delete your account. (I can’t find this feature on my Canadian Google account yet…which could just be an indication of my general lack of tech ability).

In addition, you’ll see that the digital assets clause gives authority to the executor to take control of all “devices”, i.e. computers, tablets, smartphones, etc. There are cases where a beneficiary refuses to surrender the deceased’s computer to the executor, claiming that it is a personal effect to which the beneficiary is entitled under the will. The executor mainly wants the computer to access passwords saved on cookies, and ends up in an unnecessary squabble with the beneficiary.

Some digital assets really are assets, i.e. they have monetary value in and of themselves. Examples are popular domain names, transferable gaming credits, a Paypal account with a credit balance, points from programs that survive death if the right steps are taken (e.g. Aeroplan), right up to an online business (e.g. Ebay). If you want these assets to go to the person inheriting the residue of your estate, then a specific provision in your will may not be required. However, if you want your gaming credits to go to your nephew Jordan, because he is the only person in the family remotely likely to enjoy them, your will better say so!

Additional will provisions may also be required if you own digital assets that require maintenance in order to keep them alive and healthy after your death, for example a domain name. If your executor fails to pay the expenses associated with keeping your domain name active, the domain name will lapse, and may be acquired by someone else.

Many people are happy to have their domain names die with them – katybasi.com can certainly wither away when I’m gone, unless there’s another Katy Basi out there willing to pay my estate for it (I’m not holding my breath…) However, if I wrote a book called “Prepare to Die”, and I registered preparetodie.com, I may want to create a fund in my will from which all expenses relating to the domain name and corresponding website would be paid after my death. I’m certain that my book
would be a bestseller, triggering an avalanche of royalties that would be paid to my estate for years to come – so I would want my executor to be instructed to keep the domain name alive even when I’m not, and to be given the means to do so. (Yes, my book title is a reference to the movie “Princess Bride”, for the Mandy Patinkin fans – you know you’re out there!) 

Given the fact that our digital lives seem to change hourly, with accounts and services added or dropped constantly and passwords theoretically changed on a regular basis, your will cannot list all of your digital assets. It would, however, be helpful for your executor to know where to find a list, tangible or ethereal, of your digital assets and the passwords to access them. There are many online services that can help, e.g. Legacy Locker, Estate++.

Finally, you may want to consider whether you have any digital assets that you do not want anyone to know about after your death (I’ll let your imagination take over here). In that case, you may want to find a service like Google’s that will simply cause them to disappear.

I make no guarantees about how long this particular blog post will stay up-to-date. Perhaps five minutes given the rapid pace of change in this area. Enjoy the process!

Katy Basi is a barrister and solicitor with her own practice, focusing on wills, trusts, estate planning, estate administration and income tax law. Katy practiced income tax law for many years with a large Toronto law firm, and therefore considers the income tax and probate tax implications of her clients' decisions. Please feel free to contact her directly at (905) 237-9299, or by email at katy@katybasi.com. More articles by Katy can be found at her website, katybasi.com.

The above blog post is for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Readers are advised to seek specific legal advice regarding any specific legal issues.


3 comments:

  1. Well, Inigo, I think Katy may know many real manly men that HAVE seen the Princess Bride. Off hand I can list 10 adult males over the age of 35 who have seen it. (We won't get into how many of them watched it in order to continue sleeping in the same room as their beloveds. Or how many of them annoyingly go off to do what they were nagged about with a blank faced "As you wish.")

    Good information about the e-assets. I kind of wish I had read this BEFORE we added the update to our wills about the RESPs. Ah well, I guess our lawyer will be happy to hear from us again so soon....

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    1. Hi Bet

      Very funny. I would suggest 9 of the ten watched under duress :)

      Your second comment begs the question, why did your lawyer not broach the subject and others in the first place - when u revised your will. Just saying.

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    2. Because you get what you pay for! (We should have gone with someone better of course but since we didn't know anyone at all, we just used the first name that cropped up in conversation while waiting for the kids outside the school.)

      Let that be a lesson to any of you readers picking a lawyer!

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