Table of Contents
- Explanation of Digital Assets
- Importance of Including Digital Assets in Estate Planning
- Ways to Preserve Your Online Legacy
- Include Digital Assets in Your Will
- Update Your Will Regularly to Include Newly Acquired Digital Assets
- Provide Access Information
- Consider Privacy Concerns
- Use Estate Planning Tools to Enable Proper Administration
- Consult with Legal Professionals
- Key Steps to Protect Your Digital Assets
- Best Practices for Managing Digital Assets
- Bottomline
The information contained herein is for educational purposes only and should not be taken as legal advice, as tax laws and regulations can change within weeks and render some tax strategies void. For tax advice, consult our professionals by logging on to our website: www.FaberLLP.ca.
Digital assets are equally important as tangible assets. Those who have spent considerable time online or built an empire digitally may have most of their property not on the ground but in a complex laser form, disc, cloud or on the web.
In this regard, estate planning for digital assets becomes more important not only because they are a worthwhile asset that you should pass on to the next generation but also because, in the absence of an estate plan, no one will know if they ever existed, and so will never see an administration.
The following are some of the ways you can undertake such estate management.
Taking these steps ensures that your digital assets are appropriately accounted for and managed as part of your overall estate plan in Canada.
Before moving forward, let’s review digital assets and their estate management.
Explanation of Digital Assets
A digital asset is something in a digital form that contains or can create value. These include e-currencies, accounts, online creations, or other digital belonging.
However, you might make something digital but without value as an asset. So, those things that are of value in your eye are your digital assets.
Some Examples of Digital Assets
- Cryptocurrencies
- Online accounts
- Digital media
- Intellectual property
Importance of Including Digital Assets in Estate Planning
Including digital assets in Estate Planning is as important as including physical assets. If you do not do so, the following problems can occur:
- Your heirs will not have access to your assets.
- Your executor will not know if you own any digital assets.
- Someone may steal those assets and deprive your heirs of them.
- An ill intention can misuse your assets.
- Legal complications
- Privacy concerns
- Risk of loss or unauthorized access
Ways to Preserve Your Online Legacy
- 1. Understand Canadian Laws
Familiarize yourself with the laws and regulations in Canada related to digital assets, privacy, and estate planning. While specific laws governing digital assets might not exist, understanding the legal landscape will help you make informed decisions.
- 2. Include Digital Assets in Your Will
Your will is a crucial document for estate planning. Specify how you want your executor to handle your digital assets after your death. You can designate a digital executor to take care of your digital assets according to your wishes.
- 3. Update Your Will Regularly to Include Newly Acquired Digital Assets
Digital assets and online accounts can change frequently, so it is essential to update your will regularly to ensure it reflects your current digital asset holdings and wishes.
- 4. Provide Access Information
Ensure your digital executor or loved ones can access your digital assets after death. Such steps include providing them with information such as usernames, passwords, and any necessary instructions to access your online accounts.
- 5. Consider Privacy Concerns
Be mindful of privacy concerns when sharing access information for your digital assets.
You can use a secure method, such as a password manager with robust security features, to share this information with your digital executor.
- 6. Use Estate Planning Tools to Enable Proper Administration
In addition to a will, consider using other estate planning tools, such as trusts, to manage and distribute your digital assets.
A trust can provide more control and flexibility over your digital assets, especially if you have complex digital holdings.
- 7. Consult with Legal Professionals
Estate planning can be tricky, especially when it comes to digital assets.
Consider seeking advice from legal professionals experienced in digital asset management to ensure your wishes are properly documented and legal.
- 8. Key Steps to Protect Your Digital Assets
- Take inventory of your digital assets
- Organize and document important information
- Appoint a digital executor
- Update your will and other estate planning documents
- Consider privacy and security measures
- Utilize estate planning tools (trusts, powers of attorney, etc.)
- 9. Best Practices for Managing Digital Assets
- Regularly review and update your estate plan
- Use secure methods to store and share access information
- Consider the implications of digital assets in international estate planning
- Consult with legal and financial professionals
Bottomline
To conclude, although more than half of Canadians have yet to undertake estate planning, it is important in the case of digital assets; not doing so can be fatal for your online empire and can be a disservice to your loved ones.
So, contact an expert today and plan to preserve your digital legacy.