The days of rooting through deceased parents’ basements for old photos, videos and heirlooms are fast disappearing.
That’s because older Canadians are becoming more active online. A 2010 Statistics Canada study found 60% of people aged 65 to 74 go online regularly, as well as 29% of those older than 75.
What’s more, boomers are just as likely to own several tech gadgets as younger Canadians, says a 2012 Ipsos Reid survey. They’re storing photos and documents within locked online accounts and password-protected devices—meaning executors will need more than house keys to gain access to the complete legacies of relatives.
Problem is, many online account providers have inflexible privacy guidelines (see “Policies of popular account providers,” below).
Consider PayPal. Though it’s obliged to transfer existing account balances to estates after users die, it won’t do so for those who become incapacitated. If a user wants someone to manage his account, he needs to grant that person power of attorney.
This is a crucial step if your clients are successful sellers on eBay or Amazon, because they may have large account balances. Having power of attorney grants relatives access to funds.
Policies of popular account providers
PayPal: To close an account and deal with a leftover balance, an executor needs: his ID; a cover sheet stating the account must be closed; a copy of the user’s death certificate; a copy of legal documents or the will; and a letter specifying how to deal with remaining funds.
Second Life: Gamers can amass assets within their accounts, such as virtual real estate and currency called Linden dollars. They can transfer these assets to another user if they arrange it within a will or legal document prior to death. But while Linden dollars can be bought or sold on the game’s internal exchange, they can’t be exchanged for real funds. The U.S. Treasury is examining how to classify and regulate virtual currencies.
Google: The company introduced an estate-planning tool called Inactive Account Manager this year. It allows clients to direct how emails, videos and other property should be dealt with if their accounts become inactive for a set period of time, which they have the power to choose.
Microsoft Hotmail: The Microsoft Next of Kin process allows for the release of Hotmail contents, including all emails and attachments, address books and contact lists, if a user is deceased or incapacitated. Executors can also close accounts.
Facebook: Profiles can be closed or memorialized if the executor emails the social network with the deceased relative’s Facebook URL and email ID, along with proof of death. Facebook adds, “We’re only able to consider requests […] from an authorized representative. The application to obtain account content is a lengthy process” and requires a court order.
Twitter: The site digitalizes users’ public tweets, hands them over to a beneficiary and closes accounts upon death. Executors must fax or mail the client’s account user name, a copy of his death certificate, the executor’s government-issued ID, and a notarized statement requesting deactivation.
LinkedIn: The executor must fill out a death verification form to close an account. Site administrators can locate the account using names and personal information if necessary.
Similar stringent policies apply to non-monetary accounts. Thanks to privacy laws and user policies, relatives or executors must go through the courts if an account owner hasn’t made data-sharing arrangements.
Take a 2004 U.S. case where a father spent a year battling Yahoo over access to his deceased son’s account. The company wouldn’t let him log in to read old emails or view photos. At the time, Yahoo vowed to “uphold the preferences that [were] part of the agreement [it had] with…users regarding…privacy.” Ultimately, a probate court forced Yahoo’s hand and the father won. But despite that outcome, the email provider said it still wouldn’t alter its policies.
Further, the company said that, as of July 15, 2013, relatives or executors only have one year to deal with inactive accounts before an ID is freed up for another user to adopt.
What’s more, digital asset protection “is such an emerging area of estate planning [that] we are really still in the what-if stage,” says Erin Cowling, a Toronto-based lawyer who previously worked at Whaley Estate Litigation.
Nevertheless, disputes about digital assets are likely occuring, she says. She notes mediation is mandatory in estate litigation, and it’s also confidential. Since the resolutions wouldn’t be publicly recorded, solutions to digital asset squabbles aren’t widely known.
Making the case
When starting the estate-planning conversation, bring up the protection and transfer of digital accounts as a new planning frontier, says Marlena Pospiech, private wealth advisor at BMO Harris Private Banking. Offer a list of the accounts and assets clients should think about. These include any that have mo- netary value, like web URLs or PayPal accounts, as well as any with providers offering multiple services where sentimental records may be stored. For instance, Google offers email, file storage and payment solution platforms.
If clients aren’t convinced digital estate planning is crucial, let them know “there’s the risk of identity theft after death if they leave accounts unattended,” notes Pospiech.
That’s because most accounts remain open if providers aren’t alerted of a user’s death. She’s seen cases where people have received emails from dead relatives because abandoned accounts have been breached.
Include an online accounts section in estate planning checklists. Toronto privacy lawyer Anita Fineberg suggests clients document:
- online accounts, along with the user names and IDs for those accounts;
- all mobile devices, compu-ters and flash drives; and
- owned websites.
Next, clients must decide how each account or item should be dealt with after death. Facebook accounts, for instance, can either be memorialized or closed. And clients may have certain emails they only want one person to see.
These details should be included on a consolidated spreadsheet, which clients can update every time they purchase new gadgets or open new online accounts.
Because this spreadsheet will change often, Fineberg suggests keeping the details out of the main will. “Clients don’t want to spend time and money changing their wills, so they can create digital schedules or appendices that are also considered upon death.” The documents are referred to as codicils and are incorporated into wills.
Clients should transfer files from outdated media, such as floppy disks or vhs tapes, to newer media
Plus, if they’re in the main will, they’ll become public record—which could be a privacy concern, says Toronto estate lawyer Daniel Nelson. Secondary documents that won’t go to probate avoid that problem.
Hard copies should be locked away, and digital copies must be stored on encrypted devices.
And the person tapped to handle these sensitive files and devices should be tech-savvy, as well as someone the client trusts with the data, says Nelson.
He suggests choosing only one digital executor. That person can be separate from the executor of the main will. A client should inform the digital executor of his obligations before she dies, and provide him with the locations of digital assets.
Digital account owners may also want to spell out any privacy boundaries. For instance, clients could ask an executor to close certain accounts without sharing their contents with others, says Nelson.
An estimated 3 million Facebook users died in 2012
Source: Tech expert Nathan Lustig
Canada lacks digital laws
Lawmakers in Five U.S. states—Connecticut, Idaho, Indiana, Oklahoma and Rhode Island—have developed clear digital laws.Our southern neighbours have also formed a committee to push for national digital estate laws, says Anita Fineberg, a privacy lawyer in Toronto.
But Canada lags. Without provincial or federal directives, your clients’ executors will be stuck battling electronic service providers to gain access to accounts after clients die. That’s because service providers typically block third-party access due to privacy breach concerns.
Though the powers granted to executors should have priority, that’s not what happens in reality.
It helps, however, if deceased users have provided executors with their account information, as well as instructions that detail how accounts should be handled after death.
Further complications stem from the fact that most people have different devices for work and personal use. So executors may have to contact the deceased’s employer if documents aren’t transferred to personal devices before death.
Employers have started creating clearer policies regarding what documents the company owns, and what the employee owns, adds Fineberg. New technologies and devices, like the BlackBerry 10, are also introducing apps letting users categorize information as work-related or personal.