The Financialist • Issue 129 • April 2016
BY TERESA BLACK HUGHES CFP R.F.P. CLU FMA CIM FCSI
Almost forty years ago in 1977, personal computers made their entrance into our lives as “microcomputers” and in 1980, as “home computers” intended for the non-technical user. The electronic mail service Hotmail was founded in 1996, e-books debuted in 1998, the community connection network Facebook started in 2000, and iTunes began in 2001. Online banking made an entrance between 1983 and 1994. We correspond, share, game, read, listen, and bank in a digital world. But what happens to all of this data when we die or become incapacitated?
First, we have to understand what we actually own and second, we have to understand who owns the pathway to that digital asset.
Some information such as iTunes or e-books are “lent” to us: a single user during our lifetime. We are granted the right to use the file or record. It is generally not intended to pass on – this is part of the reason why it’s usually less costly than print or hardcopy. Pathways to our data on services such as Facebook, or Hotmail are controlled to ensure privacy regulations are met. The email content or pictures may be ours, but the service provider is not.
Unlike a paper file folder, you’ve got gatekeepers to pass. While we’re alive and well, we don’t want anyone else to gain access, but when we’re gone, we’d like someone to close off access to that digital material. In some cases, we’d like our attorney or executor to extract information before they close off – and therein lies the problem.
Legally speaking, property rights (related to a particular thing) survive death and are enforceable; contractual rights often do not permit a personal representative access to the files and information stored with a particular service. Unlike the US, there are no specific laws in Canada providing executors with the authority to access, manage, distribute, copy or delete digital assets. The executor is reliant on the terms and conditions of each service provider. It is important to note that even though the representative may have the username and password, it may be a criminal offense to access an electronic service without the service provider’s authorization. In the case of online banking, the fraud protection could be lost if the bank discovers that the password has been shared.
The development and use of digital assets is a maturing trend and there are some good practices we can employ to provide clarification to our personal representatives – in death and disability – to tend to them.
1. Prepare a list of all of your digital services and access information. This needs keeping up and safe storage. The list could be kept on a service such as keepass or on a password-encrypted excel sheet. There is no perfect solution here, as the passcode to the list needs to be given or held by someone with great care.
2. Provide intentional instructions to your personal representatives. Include a clause in your will and power of attorney to setting out specific powers with respect to the digital assets.
3. Consider what you’re holding out there in the e-world. If you would like to pass it on, be sure there is something to pass on – that it is not merely lent to you while you are alive, and/or that you have a hardcopy of this important asset.
4. Review your will and power of attorney regularly with your legal advisor. Language and authority may change over time. Your legal advisor can help keep you current.