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Using Technology to Plan Your Estate

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With social media, electronic banking and online investing, our lives are becoming increasingly digital. Important documents containing crucial information, such as financial statements and tax receipts, are being stored in on-line databases, creating elements of a virtual estate. With this in mind, technology is playing a bigger and bigger role in estate planning.

When thinking about how technology affects estates, there are three components to consider. The first is that not everyone dies old. The vast majority of today's young people have an intense presence on social media and on the Internet in general. For example, there has been a lot of recent attention paid to what happens to an email account or Facebook profile once its owner passes on.

The second component to consider is the proliferation in the use of online banking. The convenience of online banking has appealed to Canadians of all generations. In our practice, it is not uncommon to see people who are in their seventies that are regular online banking customers. Because it is a somewhat newer way to manage personal finances, online bank accounts are not always organized and protected. It is important to understand that these accounts do not cease to exist on death and that they need to be managed with that in mind.

Thirdly, people need to become comfortable with the idea that they are leaving behind a 'virtual estate', be it financial, visual or written, or on social media. These things should be considered when taking steps to create a comprehensive estate plan.

While most Canadians currently do not take their virtual estate into account, many experienced estate planning advisors are now asking the right questions in order to do so. For example, obtaining a list of bank accounts along with the appropriate login information, such as usernames and passwords, can be crucial for estate administration. However, people must be aware of the responsibilities that arise from things like jointly-held electronic bank accounts. Take, for instance, a situation where an adult child has online access to a jointly-held bank account with an elderly parent who passes away. What, then, happens on death? Does it need to be dealt with immediately, seamlessly and how is it to be dealt with in terms of the rest of the family? These questions are not easily answered and should be put to an experienced professional who is knowledgeable about estate administration issues.

Technology can both simplify and complicate estate planning. It can complicate traditional estate planning in the sense that we are now not only dealing with assets that people are comfortable with, such as personal assets, real property and bank accounts; we are now dealing with digital media presences and the digital economy. Digital assets can be somewhat tricky to deal with because, in the past, estate planners never had to consider things like web pages, online banking and social media accounts. Aside from knowing where and how these things exist and the information required to access them, it is also important to know if a person wants them to continue after death. For instance, does a person want their Facebook account to be memorialized after death or do they want it shut down?

The only way to deal with these novel issues is through planning and discussions with the person or persons in charge of administering the estate. Not communicating this information can lead to severe complications. It is difficult enough to compile a list of digital assets and accounts, let alone how to access those assets online. There are practical difficulties associated with locating and getting access to those accounts but complicated legal issues can also arise when, for instance, jurisdictional concerns come to light. Most social media vehicles do not have their bases in Canada. For that reason, we often advise our clients to provide their access information to their executor(s). Although tech-savvy individuals get excited about being paperless, an old fashioned printed-out list of these accounts and how to access them can go a long way. We also advise our clients to create this list and keep it somewhere safe, perhaps with their will and other testamentary documents. There are also helpful online services that allow people to compile this type of list containing all the necessary information, accessible with one username and password, giving them the best of both worlds.

Although some people might find planning for their digital death daunting and unmanageable, the worst thing to do is nothing. The virtual estate you leave behind is important and deserves similar attention to that given to your traditional estate. Doing so will save your family and loved ones a lot of energy and expense when you finally log-off for good.

*Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.