Today’s Executor is a Digital Executor
"Technology is the new player at your client's estate planning table... the future executor is also a digital executor and the future is here"
If the pandemic has done nothing else, it has immersed many of your clients in technology. Forced to shift “non-essential work” to telework and now reliant on technology to keep their social connections, your clients are likely hooked on tech like never before.
Technology immersion includes the gamut of using video conferencing for meetings, Zoom for fitness classes, online grocery ordering, financial institution interaction, and the internet as a sandbox for new hobbies. Our world has a whole new vocabulary driven by digital immersion. Terms such as Zoom-bombing, telemedicine, flattening the curve, and contact tracking have entered the everyday lexicon. Your client may not have had a digital life, digital assets, or a digital estate before the pandemic, but they do now. And that has an implication on estate planning, incapacity planning, and estate administration.
The term ”digital asset” is just not that user friendly. Rather, they are your memories, your money, and your records, which are now in digital form instead of paper. Think of loyalty points, cryptocurrencies, social media accounts, web domains, gaming accounts, digital photos, cloud accounts, and email. If you are looking for a clinical definition, consider that digital assets are simply electronic records. The Society of Trust & Estate Practitioners (STEP) considers digital assets to have some of the same characteristics as physical assets, such as having financial or sentimental value.
There are three questions about digital assets the estate trustee should ask:
1. How will clients and their beneficiaries feel if digital assets are lost? Just as you would advise a client on planning for their prized physical possessions, the same must be said for their digital assets. For digital assets of sentimental value, such as social media accounts, wishes and preferences about account memorialization might be just as important to the deceased as to what happens to their beloved pet or coin collection.
2. Is the trustee or executor ready? Without a paper trail the amount of lost or inaccessible assets (both physical and digital) will grow and estate administration will become more challenging with the proliferation of a client’s digital assets. There is also the issue of volume. It’s not uncommon for people to have close to a hundred online accounts, and just as likely, clients may have their physical lives intertwined with their digital lives. The executor will need to work at digital speed. It’s no longer a matter of when an executor will get around to changing the physical locks on the deceased’s home, they will need to immediately lock down the deceased’s digital life in the name of cyber security to prevent identify theft. Social media may seem trivial and the last thing a family needs to worry about at the time of death of a loved one, but social media provides a wealth of information for cyber crooks upon incapacity or death. This should be of material concern for the executor. Corporate executors and trust companies are only now beginning to realize the implications of their client’s digital assets, and haven’t yet raised a collective alarm bell. Arguably, the average age of today’s trust company client needing administration mutes the growing swell of the coming wave of clients with extensive digital portfolios.
3. Are the client’s digital assets accessible? If clients do not plan for their digital assets, those assets will likely be invisible, inaccessible, or not transferrable upon incapacity or death. In this new world, inclusion of technical management considerations will be required in an estate plan. Documenting, testing, and communicating those plans are now considered essential.
Provider Terms of Service (TOS) will significantly hamper planning efforts. Don’t be too comforted by Canada’s proposed fiduciary access laws because the situs of a client’s digital assets may play into the equation. Look to the case of an Ottawa mother trying to get access to her deceased son’s online accounts. Although a Superior Court Judge in Ottawa issued an order in 2017 to give her access, two of the big tech giants based in the US have yet to comply, citing they will only respond to a US court order.
Looking Ahead
If “technology is the new player at your client’s estate planning table,” then the estate advisory community, including corporate fiduciaries and trustees, not only need to be tech ready and knowledgeable about this new topic, but capable of guiding clients through this new planning paradigm.
Specifically, the entire client engagement lifecycle including policies, procedures, processes, and the associated risk management framework need to be updated to address digital assets. Companies, organizations, and non-profits need to consider the platforms and tools involved and deal with the volume and variance of a client’s digital portfolio in planning and administration. Fiduciaries must be knowledgeable about technology and this new asset class, comfortable with the subject when engaging with clients during planning, and remain current as technology changes.
"For all that is good and convenient about the digital age, it poses real challenges for your estate planning; and eventually for the executor." -Your Digital Undertaker, Chapter 10
Your Digital Undertaker Can Help:
Speaker for Advisor Education, Guest Speaker for Client Events, Consultant for Advisory Services on the Technical Management of Digital Assets.
Sharon’ Speakers BIO is available on LinkedIn. If you are looking for an “engaging, dynamic speaker, Hartung knows how to hold an audience.” Succession plans have never been more relevant. As baby boomers age, retire and die, an unprecedented sum will be bequeathed. Wealth Professional Canada reported in 2018 that between 2016 and 2026, around $1 trillion will pass through inheritance in Canada. Leverage the topic of digital estate planning for an advisor or client event.
Contact Us at Your Digital Undertaker. Your Digital Undertaker Social Media:
- Yourdigitalundertaker.ca
- Twitter (@UndertakerTech); LinkedIn (Sharon Hartung); Facebook (Your Digital Undertaker); Instagram (Your Digital Undertaker)
Where to get the book Your Digital Undertaker: Exploring Death in the Digital Age in Canada for Your Clients:
- Available in digital (e-book), paperback, hard copy formats.
- Amazon
- All other book sources including bulk order for Advisors
Your Digital Undertaker - Information Took Kit for Advisors (ISBN: 978-1-989349-04-5) - has resources that are intended to increase your awareness of the importance of engaging and preparing your organizations and clients of this new digital planning paradigm. Your Digital Undertaker - Podcast: Search on “Your Digital Undertaker” on your favourite podcasting platform.
Copyright ©2020 Sharon Hartung All rights reserved. No part of this document may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher, except by reviewers, who may quote brief passages in a review.
DISCLAIMER: The intent of this information is to encourage individuals and organizations to consider the importance of digital assets from a technology point-of-view in the context of a will, estate planning, and estate administration. The author does not warrant or guarantee the accuracy or currency of the information provided herein. The laws in a jurisdiction change and are potentially different than what was presented here. The author is not providing advice, and you are encouraged to seek qualified professional advice authorized in your jurisdiction for your specific situation.
Updated: July 9, 2020
Originally published - Hartung, Sharon. “Today’s Executor is a Digital Executor.” Your Digital Undertaker®, 2020, ISBN: 978-1-989349-05-2.
© Sharon Hartung 2017-2020
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