When helping clients plan their digital assets, here are some useful tips to consider:
- Help your clients plan how to pass on their digital assets by creating an inventory. To assist, STEP has developed a template Digital Assets Inventory.
- For financial-related information, only list the names of the institutions and their contact details. Exclude all account numbers and any sensitive financial data from the inventory.
- Keep the inventory and related documents in a folder. Advise clients to keep the folder locked in a file cabinet or safety deposit box. Ensure the executors know where it is located.
- Have a flash drive or other storage device holding the same information as backup to the folder.
- Keep the digital assets inventory up-to-date and remind clients not to include passwords or privacy keys. Clients should leave separate instructions for the executors on how to access the digital accounts and wallets.
- Do not include any specific details of digital assets or cryptocurrencies in the will. If possible, include general instructions on how the client would like the executors to administer them.
- Advise clients to make a financial property and affairs lasting power of attorney providing explicit authority for the attorneys to deal with their digital assets.
- Include a jurisdiction-specific digital assets clause in each of the client’s will, power of attorney, and trust agreements.
Successful estate planning requires clients to communicate their wishes about digital assets to their loved ones, just as they would regarding any other part of their financial estate or sentimental belongings.
Use legacy tools to access the digital assets of a loved one
The best way to ensure that people have access to a loved one’s digital assets is to encourage your clients to put plans in place as part of their own estate planning.
Most internet service providers set out clear terms of use for setting up an account, and it is understandable that they may prioritise their users’ privacy over the needs of a bereaved loved one. However, our report sets out the distress that can be caused when such access is denied.
The best way to avoid causing loved ones distress is for clients to make use of the legacy tools that companies like Meta and Google already have in place. STEP’s #DigitalMemories campaign (https://memories.step.org/update-your-legacy-settings/) has details of these tools, which are free and do not take long to complete.
What should you take away from this?
The main takeaway from the survey is that advisers should be discussing their clients’ digital assets with them in the same way they would discuss and make plans for the rest of their estates.
The traditional estate planning rule would be to review plans every few years or upon a major life event such as a birth or death.
However, this is a fast-growing area, with new digital platforms being developed every day and laws currently being established in relation to digital assets to manage some of the issues arising. For this reason, it is important to ensure portfolios remain up to date and plans are reviewed frequently.
Further reading
Digital Asset Entanglement: Unraveling the Intersection of Estate Laws and Technology (LexisNexis Canada, 2022) by Sharon Hartung and Jennifer Zegel highlights the potential pitfalls and financial and emotional loss that can occur as a result of digital assets being undisclosed or legally inaccessible.
It provides valuable insight and guidance for practitioners navigating their way through the intricacies of estate planning for digital assets.
Emily Deane technical counsel and head of government affairs at STEP
