Skip to main content
your money

Mihai Simonia/Getty Images/iStockphoto

Last year in Britain, brothers Josh and Patrick Grant made the news when their spat with tech giant Apple Inc. went public. Patrick Grant had inherited his late mother's iPad – but not its password. Neither a death certificate, a copy of the will, nor a lawyer's letter stating he was co-executor of the will would make the firm budge. A court order would have cost him hundreds of pounds.

While Apple finally relented, the Grants's case highlights the increasingly complicated issue of digital legacies. Online banking, investing and other activities are convenient, but they can cause headaches for heirs when not included in estate planning.

"The issue of managing finances that have been stored electronically is much more common than 10, or even five, years ago," said Suzana Popovic-Montag, managing partner at Hull & Hull LLP, a Toronto-based firm that specializes in estate and trust planning.

As the executor of a will, she added, "if you don't know the password, or the user ID, you can't get into it."

Without such information, she said, "we are going to have delays. We are going to have situations where individuals may insist on probate to prove that you have access to these accounts. Or you might have to get a court order."

Online bank accounts are only one aspect of the problem, said Leanne Kaufman, head of Royal Bank of Canada Estate and Trust Services and a member of the Society of Trust and Estate Practitioners. "It could include intellectual property that is only on someone's hard drive, or if they were a writer, or had photographs that they consider intellectual property.

"It could also include, believe it or not, avatars in online worlds and games that may actually have inherent value, that can be sold or traded, and that may be an asset of the estate, if it has sufficient value."

Estate planners should create a list, says Ms. Popovic-Montag. "Here's what I have, and here's how you access it. It means sitting down and thinking of every single thing that you do on the computer, that you do remotely or somehow access through social media."

The problem, however, is that users frequently update their passwords or switch accounts. "It's not static information," said Ms. Kaufman. "It's dynamic information."

Not surprisingly, a slew of new companies have set up shop offering to store passwords or sell software allowing users to do so on their own.

Joe Henderson co-founded Minneapolis-based Estate Map, in 2013 together with Chris Huber, a software engineer with a masters from MIT. The company, which "helps you create a comprehensive map of your most important information, assets, and wishes," was inspired, he said, by the realization that he had photos of his children on a half-dozen websites and devices, many of which his wife could not access.

As an estate attorney, he said, he has watched families "scramble and pull their hair out about their inability to access really basic information. … Real money is left on the table."

The amounts of money in unclaimed assets is considerable. In the United States, state governments, to which by law unclaimed bank accounts and safe deposit boxes are turned over, are sitting on more than $58-billion worth of assets, Mr. Henderson said. The Bank of Canada reported last year that it was holding nearly a billion dollars in unclaimed bank accounts and unredeemed bonds.

According to Ms. Kaufman, RBC includes "triggers around digital assets" in its planning materials for clients.

People who are planning their estate should be seeking advice about online accounts and digital assets from a lawyer or financial adviser, said Ms. Popovic-Montag.

"We have seen a trend toward people who are doing estate planning also talking about a digital will," she said, "and creating an infrastructure to deal with that. Like saying, 'I want a digital executor, someone who is computer savvy to be able to deal with my accounts.'"

Mr. Henderson says, "We are just now as a society beginning to realize that this is a growing problem. I think 10 years from now it is going to be a rule," he said, "and people will think of this even before they think of doing a will."

Interact with The Globe