Protecting Digital Assets – and Avoiding Identity Theft

13 Oct Protecting Digital Assets – and Avoiding Identity Theft

Just one or two generations ago, an executor would unearth financial information from overflowing filing cabinets in the basement or the attic of the deceased. Today, that information is more likely to be found on a laptop or a smartphone than in a filing cabinet.

If the executor is lucky, the will may include information and instructions about the digital assets. More commonly, the digital assets have been overlooked and the executor will need to track everything down.

This may be a challenge, but taking care to protect all the digital assets isn’t just about the monetary value of the estate – it’s also about protecting the deceased from identity theft.

What are digital assets?

A digital asset, used broadly, is any file stored digitally that the deceased can claim ownership of. This usually brings to mind photos and videos, but digital assets include a whole range of file types. Some of these have real monetary value – like the frequent flyer miles that the globe-trotting Anthony Bourdain bequeathed to his second wife – while others may offer sentimental value to the right beneficiary.

Digital assets include:

• Email addresses and websites, whether personal or business;
• Cloud storage accounts, such as Dropbox and Shutterfly;
• Social media, such as LinkedIn, Facebook and Instagram;
• Online accounts, including bank accounts, brokerage accounts, and credit card accounts;
• Commercial accounts with real monetary value, such as eBay and PayPal;
• Digital currencies, such as Bitcoin;
• Online gaming accounts, such as Internet poker;
• Loyalty reward programs and AirMiles programs; and
• Accounts with virtual property, such as Kindle or iTunes.

Some of these assets are included for identity theft purposes, which means you are looking for login and password information in order to protect them and possibly close them down. Other assets may contain real money, which will need to be folded in with the other assets.

How should executors deal with digital assets?

Today, there is little Canadian legislation to guide this process. However, it is critical that the executor collect as much information as possible to protect the deceased’s estate.

Follow these best practices:

1. Collect all devices. All digital devices – including computers or laptops, tablets and smartphones – contain personal, private information that the executor has an obligation to keep secured. A single breach can lead to identity theft.
2. Make a master list of all accounts. This usually begins with any paperwork found in the home. Be sure to include any documents, photographs or other files found locally on the device(s). Search through browser history to collect any additional data. The primary email address is of utmost importance here, as this will serve as a “filing cabinet” of further information.
3. Review service agreements. Every digital provider – from Facebook to PayPal to Kindle – has a service agreement. Even if the login information and passwords were provided, you may not have the right as the executor to log in that way. Some of these agreements have timelines, so you will have to prioritize the assets appropriately (i.e., how long it takes an account to go dormant).
4. Check the will. Consult with the lawyer, as well as any personal representative or named beneficiary, as appropriate. And be sure you conform to the deceased’s wishes, if there are any.
5. Contact the service providers. Follow their process for gaining access, as the processes may vary. Take appropriate steps to close accounts or delete information. In the case of social media accounts, you may want to create a memorialized account.
6. Prepare devices. The deceased may have specified beneficiaries for each digital device. Before passing them off to a new owner, however, ensure they have been wiped and contain no history or private information.
7. Pass on digital assets. The deceased may have specified beneficiaries for digital assets. Before doing so, review terms of service agreements with each service provider. There may be complicated legal issues of ownership when it comes to certain content, such as ebooks, music or movies.

Digital assets will undoubtedly become bigger and more important parts of our lives. But as with other areas of estate planning, taking careful, methodical steps and consulting with an expert is always the best way to go.

To learn more about the role of the executor, contact us.

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.