Estate Planning 101: How to Include Passwords, Online Banking & Social Media

Canadians are embracing new digital technology and tools to help them in all aspects of their lives, including financial management. Estate planning must evolve in the 21st century to accommodate this new trend or else face leaving behind a frustrating digital maze for executors and beneficiaries to navigate.

“86% of Canadians use at least one financial online tool.”  – Estate Planning In the 21st Century: New Considerations In A Changing Society, BMO Wealth Management

An interesting case study released by BMO Wealth Institute of Canada outlines the importance of adding these new digital assets to your estate plan. The survey also revealed some important facts that Canadians should know, as well as some practical steps to take when adding these properties to your plan.

What is Digital Property?

Digital property is any online information about you or that you have created with a digital tool. Your information can be online or in an electronic storage device – this includes the passwords necessary to access your digital property.

“The surge in boomers who have a presence online has created millions of intangible digital assets.” – Estate Planning In the 21st Century: New Considerations In A Changing Society, BMO Wealth Management

Identifying what is considered digital property (or digital assets) may be confusing. Below is a list of digital property that you may own or use in your daily life:

  • Online bank account

  • Electronic statements

  • Online investment account

  • Online bill payment – credit cards, phone bills

  • Online store accounts – Amazon, eBay

  • Email

  • Loyalty programs – frequent flyer miles, grocery store points

  • Virtual money – PayPal

  • Social media accounts – Facebook, Twitter, etc.

  • Entertainment accounts – iTunes

  • Photo storage/sharing – Flickr, Picasa

  • Personal websites or blogs

  • Softcopy receipts

How Many Canadians Have Digital Property?

Canadians use digital tools every day – posting on social media, checking emails, for online banking, and more. To put digital property into perspective:

  • 88% of individuals who are 50 and older have a Facebook account.

  • 86% of Canadians use at least one online financial tool.

  • 57% of Canadians over 55 preferred online banking to traditional banking.

  • Older boomers (ages 55 to 66) are the biggest group of online spenders and spend more money on technology than any other demographic.

How Many Canadians Currently Include Their Digital Assets?

The BMO Wealth Institute of Canada survey also asked Canadians about their current practices when it comes to digital assets to determine if the necessary estate planning shift has begun:

  • 50% of Canadians have no thought of or even considered adding their digital property to their estate plan.

  • 36% of participants don’t think it’s necessary to add their digital properties to their plan.

  • 8% mentioned that their legal professional didn’t bring up the topic.

These responses are very telling about the fact that many Canadians are not aware that their digital assets often have an emotional and financial value. These digital properties, including sentimental photo collections or personal information files, can risk becoming lost if they are overlooked in the estate planning process.

How To Add Digital Property To Your Estate Plan

If you have not included your digital assets in your estate plan, you can follow these four steps to ensure you are properly prepared:

  1. Organize Your Digital Property

Create a password storage solution to keep your login and password information safe. This can be a USB stick, on paper, or a digital storage solution such as Passpack.

  1. Choose And Notify An Executor
    Consider who you select as your executor very carefully, especially if you are choosing your children. Once you’ve selected an executor, remember to provide them with key information on where to find your digital property and how to access it.

  1. Review Your Will
    Once your digital property list is finished, it is important to include it in your will. Contact a professional to assist you in administering any will changes. If you do not have a will, you can download a free Will Preparation Guide here.

  1. Advise Your Future Executor To Purchase Executor Insurance
    This step can be written into your will (to download an example will clause, please click here.)  Check our risk meter to measure risk in your estate, or in the estate of anyone that you are planning to act as executor for by answering a few short questions.

If you’re looking for more help with estate planning, will preparation, or understanding the roles and responsibilities of an executor, please visit our free resources page for more information and practical guides.