These tools help estate planners and executors track digital assets

This is the third and final article in a series about managing digital assets in estates. Read the first article here and the second article here.
Digital assets have no value – financial or personal – if heirs don’t know they exist or can’t find them. But it’s hard to keep track of intangibles that leave only the faintest ripples in the bits and bytes of the internet, particularly after death. Fortunately, there are tools to help organize information about digital assets.
The Society of Trust and Estate Practitioners’ (STEP) Inventory for Digital Assets and Digital Devices is a good place to start. It’s a free PDF that divides digital assets into categories and includes columns for usernames and additional details as well as a helpful appendix.
“Make that inventory and try to figure out which [assets] are important to you and which ones have some value that you’d like to pass on,” says Dave Madan, market lead, Scotiatrust, Northern Prairies, in Edmonton who serves on the STEP Digital Assets Special Interest Group Steering Committee.
By the end of the summer, the Digital Death Clinic in Toronto expects to launch a dynamic PDF to facilitate estate planning for online accounts and digital assets. The PDF will have dropdown options for directives, allowing the user to designate who should see the contents of each online account.
“There are some services that provide acceptable digital property management and succession management, but they don’t necessarily guarantee … that the content provider will follow through on whatever requests are made by the estate,” says Lee Poskanzer, founder and president of The Digital Death Clinic.
His team has identified the common factors within terms of service agreements, privacy laws and fiduciary access laws to ensure content providers will be satisfied all criteria have been met.
Beyond the administrative mechanics, Mr. Poskanzer sees a need for financial advisors, lawyers, accountants and related professionals to understand digital assets and how their clients’ online behaviour can affect their estate and legacy when they pass away. The Digital Death Clinic will also provide training for professionals and their clients to help bridge the knowledge gap.
Another solution in development is LegacyTracker, created by Brenda Potter Phelan, a certified financial planner with Silver Compass Financial in Cambridge, Ont. Concerned about the extent of unclaimed financial assets in Canada, including digital assets, she’s building a white-label tool for financial services firms that will allow wishes to be documented, asset by asset.
“It’s still quite common for individuals not to be including their digital legacies in their wills – [and] let’s not talk about the 50 per cent of Canadians without a will or the high percentage of Canadians who have not updated their wills in many years,” she says.
She hopes that LegacyTracker will start conversations “to make more comprehensive planning possible and to reduce the additional grief that might otherwise occur for loved ones without such planning being in place.”
Carol Willes, director of estate planning with BMO Private Wealth in Ottawa, points to eState Planner, established by lawyers Jordan Atin and Ian Hull, as an additional estate tool. Designed for use by professionals, with special pricing for financial planners, it’s an all-encompassing estate planning tool that incorporates digital assets.
“It flows right through to the executor at the end of the day, with everything organized digitally,” she says.
Ms. Willes warns people should be wary of sharing passwords in any platform, even a password manager. When users agree to terms of service, they enter into a contract with the online account provider – and the restriction against sharing passwords that often appears in the fine print may violate the contract but may also be less about protecting user privacy and more commercially driven. For example, a provider may want to sell its service to those who don’t yet have an account rather than having users share their access.
Whatever the reason, the executor is not part of the contract and cannot vary the terms.
With that in mind, some password managers have features that allow password sharing with an executor or someone else after a period of inactivity, says Sayuri Kagami, senior trust specialist with RBC Royal Trust in Toronto. But she notes that sharing the passwords of a deceased user may still breach a provider’s terms of service.
“You have to make sure you’re using a product you’re comfortable with [and] trust, and that you understand any risks,” she says.
One important risk to consider is that the company helping to keep data about digital assets organized in a form that can be passed along to an executor may go out of business. If that happens, all the information may no longer be accessible.
A simple word-processing file or spreadsheet stored locally (outside the cloud) can work well as an offline alternative. Ms. Kagami emphasizes that it’s important to consider how to safeguard the file during life and after death, and to make sure the executor can access the computer or other device on which it’s saved (there are generally no restrictions on sharing passwords that provide access to devices).
Overall, guiding clients through the process of tracking and transitioning digital assets can help advisors differentiate themselves and build stronger client relationships, says Andrew Higdon, a trust and estate lawyer with KPMG Law LLP in Ottawa.
“Often, when I talk to clients, it’s not necessarily something they’ve considered before, and you bring it up and they’re very pleased that you’ve done it … it’s a clear place in which advisors can provide value.”
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