Written by: EstateBox

When most people think about assets and estate planning, they think of a file with important documents like a will and funeral plan stashed away in a filing cabinet. That may have been true in the past, but today all aspects of our lives are online, so it’s only natural that our assets have started to transfer into the digital space as well. 

Digital assets are an often overlooked, yet increasingly crucial, aspect of estate planning. 

And when digital assets are ignored when planning an estate, the results can be heartbreaking. Too many families have had to resort to lengthy legal battles in an attempt to access important digital assets after their loved ones have passed away. 

For executors, digital assets have the potential to cause massive headaches if they’re left out of the estate planning process. 

What are digital assets? 

Digital assets are anything of monetary or sentimental value that exist online or in a digital format. 

These can include: 

• Credit card or other loyalty rewards points 
• Cryptocurrencies like Bitcoin
• NFTs (non-fungible tokens) 
• Email accounts
• Digital photos, music or video files
• Blogs or websites you own
• E-books or audio books 
• Online payment accounts like Paypal
• Social media accounts 

Executors struggle to locate digital assets

One of the biggest problems executors run into with digital assets is there are no filing cabinets or boxes to search through. If someone doesn’t write down and share where their digital assets are stored, there’s no way for an executor to know those assets exist, let alone how to access them. 

However, if someone leaves details about what digital assets they own and how to access them, it can make the executor’s job a lot easier. 

A digital life and legacy planning platform like EstateBox makes it easy to keep everything safely in one place, eliminating the need for executors to go on a lengthy search. 

Legal battles with digital assets  

Unfortunately, even if someone writes down their digital assets and how to access them, it can get messy. This is because United States fiduciary access laws based on RUFADAA (Revised Uniform Fiduciary Access to Digital Assets) have been adopted in most US states. The majority of the US tech giants are based in the US, which is why Canadians often need a US court order to access Google or Facebook if someone didn’t use their platform specific pre-planning tools.

Carol Anne Noble of Toronto was in a four-year legal battle with Apple to access the account she shared with her late husband, Don. Despite being the executor and sole beneficiary of her husband’s estate, she had been unable to access the account where he chronicled his experiences with a rare form of spinal cancer. Shortly after their story was published in a CBC article, Apple reached out to Noble and finalized a deal with her lawyer that allowed her access to her late husband’s account.    

In the UK, Rachel Thompson spent three years and thousands of pounds fighting to access her late husband Matt’s Apple account. Matt died without a will or instructions about how to access the thousands of family photos and hundreds of videos stored in his account. She was eventually able to access the account but only with a court order.

Potential financial losses with digital assets   

While the Noble and Thompson cases involved assets of mainly sentimental value, other digital assets, like cryptocurrency and NFTs, are increasing in monetary value more and more. Two cautionary tales with cryptocurrency are Stefan Thomas and James Howell.

Thomas lost the paper he’d written down the password needed to access the drive that holds his Bitcoin private key, leaving $250 million in Bitcoin stored on the drive but out of reach. As of January 2021, he has 2 chances left to guess the password before the drive automatically deletes the contents.

Howell, on the other hand, accidentally threw out the flash drive that contained the private key to his cryptocurrency. Without the key, he’s unable to access $450 million in Bitcoin and is currently trying to excavate his local landfill. 

Had Howell or Thomas not lost their passwords but failed to record them somewhere safe with instructions on how to access the funds, their beneficiaries could have ended up in the same situation. Cryptocurrency is a decentralized system which means there’s no recovery process like there would be with a bank or other financial institution. 

Talk to your clients about legacy options on their digital accounts  

Luckily, these kinds of lawsuits are changing the landscape when it comes to digital assets like social media accounts and cloud-based storage services. Some companies have now started adding “legacy options” to their accounts and one can only assume that more will follow suit.

Ensure your clients are aware of the current legacy options and how to use them for their accounts.  

Facebook allows its users to add a legacy contact to manage their page after they pass away. Aside from managing the memorialized account, the legacy contact can also request the account be removed from the site.

Google’s Inactive Account Manager allows its users to decide what happens to their data if their account goes unused for a set amount of time. Users can either select a trusted person to receive their data or have the data deleted if they are inactive for a pre-selected period of time.  

Apple recently launched a legacy feature called Digital Legacy with its iOS 15 update. The new feature allows users to add trusted contacts who can access their account after they’ve passed away. Trusted contacts will need to make a request before receiving access and will have a time limit set in place before the account is deleted.

Details like payment information will not be available for trusted contacts. The new feature should prevent costly legal battles for people trying to access their loved ones’ photos and other files in their iCloud account after they’ve passed away.  

Incorporating digital assets into your client’s estate plan 

It’s never too late to add digital assets to an estate plan. Here are a few steps your clients can take today to get started:

1. Ensure they record what their digital assets are and how the executor can access them. Using a secure platform like EstateBox ensures important information never gets lost or misplaced and makes it easy to keep up to date. It’s important to keep in mind that public and private cryptocurrency keys should not be recorded in a will as this could become public information if the will goes through probate. Anyone who has both keys will be able to obtain the cryptocurrency so it’s best to keep that information private.  
   
2. Encourage clients to use legacy contact features like Facebook and Google currently offer and Apple will offer in the future. These features only help if users opt in.    
   
3. Suggest that your clients store digital assets of sentimental value like photos and videos in more than one place. If they use the cloud, having a backup copy on an external hard drive and recording where it’s located ensures their loved ones will have access, even if there’s issues with getting into the cloud.
   
   Having someone pass away is stressful enough, getting locked out of the cloud account and unable to access meaningful photos and videos only adds to that stress. 
   
4. Ensure your clients have a digital assets clause in their will so you’re able to access and manage those assets. Their lawyer will be able to make this addition.  
   

Visit our site to learn how EstateBox can help your clients prepare for the future and provide you with what you need to manage their estate one day.  

EstateBox is revolutionizing the way people handle life and legacy planning by creating a simple and automated digital platform. Think of it as a virtual “box” containing all the important details, documents, and digital assets in a client’s life. Users can control who accesses and views key information so that all estate planning professionals in their ecosystem can easily collaborate. This allows professionals to provide exhaustive advice based on real-time data and insights surrounding the estate. For executors, this virtual box ensures they can easily access everything they need to manage the estate once the client passes away.

While we’re passionate about all things estate planning, we’re not professionals. We recommend speaking with your lawyer or financial advisor when putting together an estate plan.

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The above is intended for informational purposes only. It is not legal or financial advice. EstateBox and Guardian Estate Company accept no liability for any losses arising from use of the above information. We recommend you speak to your lawyer regarding your unique situation.