Managing clients’ digital estates

When a client dies, he or she leaves a trail of these online accounts, which must be wrapped up.

“Do you want your children to get birthday reminders [from Facebook] 10 years after you’re gone?,” asks Tina Tehranchian, branch manager and senior financial planner with Assante Capital Management Ltd. in Richmond Hill, Ont. “These are things you have to think about.”

If your clients’ online accounts were not properly managed and listed in their estate plans, those clients’ heirs may find themselves wishing they could communicate with the dead in order to find out the login names and passwords to be able to terminate those accounts.

Estate planning professionals generally refer to these online accounts as “digital assets” or “digital estates.” They include accounts on business websites and social media platforms, as well as purchased digital media such as ebooks, music and movies. There is no legal definition in Canada for such property, nor is there specific legislation prescribing how these assets should be handled at the time of death.

Financial advisors typically are the first point of contact in estate planning discussions, says Suzana Popovic-Montag, managing partner with Hull and Hull LLP in Toronto. Thus, you have an important role to play in raising this issue.

Often, clients don’t consider digital assets seriously until they begin discussing estate planning with an advisor, Tehranchian says. “It’s something that I need to bring up,” she says. “So, it’s more in the education phase right now.”

Below are four questions to ask your clients when talking about their estate plans to get them thinking about the importance of their digital assets:

1. What online accounts do you have?

Ask your clients to take inventory of all their online accounts – from email addresses and social media platforms to banking and investment accounts.

A client conceivably can create more than 100 accounts over the course of his or her lifetime when you factor in shopping sites, news sites, blogs and food-delivery services. To stay focused, you should ask your clients first about their main email account.

“The old way [for executors] was you redirected all the mail from the house to come to you and that’s how you found out about things,” says Tom Junkin, senior vice president, personal trust services, with Fiduciary Trust Co. of Canada, a division of Franklin Templeton Investments Corp., in Calgary. “But so many of us now have opted into a paperless approach that nothing comes in the mail.”

But all online accounts are connected to an email address. An individual’s main email account allows the executor to track down any accounts, subscriptions or details that your client may have forgotten about or left out of the instructions in the estate plan.

Other important accounts clients should make note of include: banking and investment information, including any pre-authorized withdrawals for bills; social-media websites that have emotional significance, such as Facebook and Instagram; and accounts that have a transferable monetary value, such as Air Miles.

2. What’s the password?

Knowing what digital accounts a client has, from Amazon to Zinio, is one thing, but if the executor can’t access those accounts, that information is almost useless.

Clients should keep some kind of a record of their online accounts along with their corresponding passwords. Of course, creating such a master list, whether in a hard copy or electronic form, comes with its own set of risks. For example, the list could be stolen or simply become obsolete as passwords are updated and accounts opened or closed.

To minimize that risk, clients can store a spreadsheet containing the password information on an online document storage service, such as My Vault. Alternatively, clients can use a password-management program such as Dashlane. This way, your clients have to give their executors only one password instead of dozens.

Clients who don’t feel comfortable using a third-party service can keep more concrete lists of their passwords. Your client could list his or her accounts on a password-locked spreadsheet on his or her computer and copy the list manually into a notebook. If information is stored on a computer, smartphone or tablet, your client must be sure to inform his or her executor of the password to unlock the device as well as the location of the updated list of passwords.

3. What has to happen?

Once the executor accesses the deceased person’s online account, he or she needs to know what to do with it. While bank accounts have a prescribed post-mortem procedure, social media accounts are less straightforward. For example, should a Facebook account be deleted or should it be memorialized? (See story at left.)

The answer may not be as cut and dried as your client (or his or her executor) might think. Most accounts have terms of service agreements that the user agrees to when signing up. These agreements can limit who has access to the account and its information at the time of the user’s death.

“[Often], no matter what you put in your will [or] what power you give your executor, if the terms of service don’t allow [an executor] to access [an account] or it terminates upon your death, then [accessibility] doesn’t matter,” says Johanna Caithness, a partner with Fillmore Riley LLP in Winnipeg. “It’s totally up to the [account] provider.”

4. Do you want people to know?

Your clients might not want their family members to know about all the online accounts and information they have. For example, clients may have accounts for dating or pornography websites that they want deleted following their death – without their family’s knowledge.

“That’s a very sensitive subject,” Junkin says – but it’s a conversation you should have in order to ensure your client’s wishes will be fulfilled.

Deleting these accounts quietly could be difficult, as well. There are automated services that will close any accounts (controversial or otherwise) if an individual does not respond to an automated message within a certain period. However, Junkin cautions against using such providers because that type of service is very new.

And so is digital estate planning. As the digital universe evolves, you must adapt your strategies to manage your clients’ online assets.

The key is to get your clients to take inventory of their online accounts and start thinking about what will happen to these accounts when they die.

 

Having your clients think about what they want to happen to their online accounts after they die now is an important part of estate planning. The first step is to understand what the account provider will and will not allow. Online accounts typically have policies and terms of service agreements outlining how the account may be used, and accountholders must agree to these terms in order to use the services. The terms of service determine how the account can be managed, both during the lifetime of the user and after he or she has passed away.

Below are examples of the ways two popular account providers handle the death of a registered user:

– Facebook. Facebook users have two options regarding what will happen to their accounts when they die: the account can be deleted or it can be memorialized.

When an account is memorialized, the word “remembering” will appear next to the accountholder’s name. As well, the account’s “friends” can post comments on the profile’s timeline. All content on the profile remains visible in accordance with the privacy settings selected by the user while alive. Memorialized accounts won’t appear in other people’s accounts as “people you may know” or be the subject of birthday reminders. No one can log in to a memorialized account, and those accounts without a designated legacy contact (a friend or family member designated by the Facebook user) cannot be changed.

Facebook users can name a legacy contact to manage their account after they have died. The legacy contact can change an account’s profile and cover photos, add friends and add a pinned post to the timeline. For example, the legacy contact might use a pinned post to share information about the deceased’s memorial service. A legacy contact cannot sign in to a memorialized account, read private messages or remove friends, photos or updates on the original user’s timeline.

– Gmail. Accessing email is crucial for family and executors trying to tie up the estate of a deceased person – but you have to know the password.

Gmail, Google Inc.’s email service, will not provide a password to an email account, even if the accountholder is deceased. However, users can tell Google what they want done with their accounts when they die through a tool called Inactive Account Manager. This tool can be set to delete the account or allow certain people to access the account’s information. If your client did not make such a selection, his or her executor can send a request to Google to access the information in the Gmail account.

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