For high-net-worth individuals, estate planning is crucial. And if they are business owners, a separate, corporate will is needed for property and equipment and to ensure ownership succession.
But what about digital property? It makes up an increasingly substantial aspect of most peoples' personal wealth and business dealings, yet it is often overlooked.
Indeed, in the digital era, assets extend beyond the shares in an investment portfolio, the art on the walls or a cottage up north. It's vitally important for an estate plan to include one's digital footprint.
Consider cryptocurrencies such as Bitcoin, website domain names, intangibles such as an online brand presence and, for entrepreneurs, even funds raised on crowdfunding sites such as Kickstarter.
"People don't realize how all-encompassing those digital assets could be," says Ian Burroughs, a partner with the Vancouver-based law firm Kerfoot Burroughs LLP, which specializes in estate and corporate law.
"That all needs to be dealt with, because if you don't, you're creating a nightmare for your next of kin or executor who's going to have to sort through that mess."
"I'm dealing with a client now in their 70s, and the number of Air Miles they have in their account is staggering," Mr. Burroughs says. "It doesn't matter the age, occupation or social status of the individual."
Mr. Burroughs urges his clients to conduct a personal audit of their digital holdings, documenting log-in details and passwords for safekeeping.
Next, they should prepare a digital will that dictates ownership, access to and control of those assets. Digital holdings should be separated from personal or corporate assets.
For business owners, digital properties such as domain names, intellectual property, blogs or even social media content such as videos on a YouTube channel – particularly in the case of click-generating online personalities or social media influencers – may generate substantial revenue and could even require independent valuation, Mr. Burroughs says.
Amy MacAlpine, a wills and estates lawyer with Hummingbird Lawyers LLP in Toronto, suggests not only preparing a digital will but appointing a digital executor whose role is to manage those accounts and assets.
The executor should be given access to log-in and password information as well as direction on handling those assets, Ms. MacAlpine says. In the case of a popular blog, for example, instructions could include whether to memorialize the deceased author or shut down the blog altogether. Other directives could include whether to close an individual's Twitter feed or delete his or her e-mail account and all its contents.
Whatever the circumstances, instructions should be clear, specific and closed to interpretation, while being mindful of local authorization and data privacy laws.
Of course, care should also go into the choice of executor because that person will have access to all of one's personal information, which could be highly sensitive. Also, passwords should be kept out of a will, because if the will is probated, it could become a public document, meaning that sensitive information could be exposed online for all to see.
Ensuring an executor's access to online accounts is crucial in light of cases such as the 2011 suicide of a 15-year-old in Virginia.
Following his death, the boy's grieving parents sought access to his Facebook account. They lacked passwords to their son's page and fought the social media giant for more than a year before gaining only limited access to his photos and messages.
Ms. MacAlpine notes that restrictive social-media service agreements take legal precedence and make it nearly impossible for beneficiaries or loved ones to gain access.
"With this battle between privacy and access, if your spouse or relative doesn't have your password, they're not getting into your account. If they don't know the code for your phone or laptop, they're not getting access to your photos. You need to think about the walls around your digital assets and how they can be accessed."
The same goes for cryptocurrencies. As Mr. Burroughs points out, currencies stored in a person's digital wallet are essentially worthless and considered lost if no one can access the accounts.
Perhaps the most important consideration when making estate plans – digital or otherwise – is to act fast and not delay.
"You definitely need to plan now while you're healthy, alive, aware and have the mental capacity," says Ms. MacAlpine. "While you're established and creating wealth, this is the time to look ahead. [Without an estate plan] if there was something tragic like an accident, for instance, you're going to be in a lot of trouble."