What is Digital Estate Planning and Why Do I Need it?

What are digital assets?

Estate planning and administration professionals cannot ignore the ubiquity of digital assets. 2012 saw global sales of digital music amount to $5.6 billion and in some markets, including the US, India, Norway and Sweden, digital music sales exceeded packaged music sales. Meanwhile, e‐book sales represented an estimated 16%, and growing, of all book sales in Canada in 2012.2 Almost 18 million Canadians, more than half of the population, has an active account. The Bitcoin has been featured regularly in the news as its exchange value skyrocketed from approximately USD$100 to USD$1200 late in 2013, before falling off dramatically again.

The term “digital assets” is used in different ways by different people. In a narrow sense, a has been defined as “any item of text or media that has been formatted into a binary source that includes the right to use it.”  In a broader sense, digital include all of the electronic “possessions” an individual may have, including emails, digital photos, videos, tweets, texts, songs and e‐books, as well as online account information for websites or programs such as Facebook, LinkedIn, bank accounts, and others.5 In this broader sense, are sometimes referred to as a “digital estate” or “digital legacy”.

Digital have three distinct elements:

  1. A digital file or record. This is the data that constitutes the content of the asset.
  2. The right to use the file or record. It has been noted that if there is no right to use a file or record, then it should not be characterized as an asset.Rights of use may derive from authorship or other ownership of the content (for example, emails or original documents), or may be granted by a licence from the owner or a third party licensor (as with most digital music or e‐books).
  3. A method of access. may be categorized into (a) physically controllable digital assets (PCDA) which are stored on hardware to which the owner has access, and (b) controlled access digital assets (CADA) stored “in the cloud” on servers belonging to third party service providers and accessible on‐line with the use of a username and password.

Because the law applicable to digital is still developing, digital present unique challenges to executors, administrators, attorneys and committees. In addition, planning strategies for are rapidly evolving as the law, the e‐service industry, and user awareness of estate planning issues all mature.


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