The Four Kinds Of Digital Assets

Our daily transactions and interactions are increasingly done online and by email. Consider how many online accounts and passwords you have: Facebook, Instagram, Gmail, Netflix, Amazon, EBay, PayPal, iTunes, YouTube, Dropbox, Google Drive, Epost, Minecraft, BitCoin, AirMiles, online banking, and more.

If you are in business, this list is likely even larger. Consider websites, domain names, marketing data, customer lists… I think you will quickly realize that the list is extensive.

It is therefore essential that when you create your estate plan, or if you plan to buy or sell a business, or if you are entering into a marriage agreement, you take into account the digital assets that you own.

There are generally four kinds of digital assets: valuable assets, revenue generating assets, cryptocurrencies, and personal.

Valuable assets include websites, domain names and accounts with a monetary balance, like PayPal. Your gaming accounts can even have value. In-game currencies and gaming accounts are often sold for Canadian currency. Some people have made millions selling and renting virtual land in the game Second Life. Others have made money selling their World of Warcraft gaming accounts.

Secondly, there are the revenue generating assets. Many websites, blogs and vlogs generate advertising revenue. The top 40 YouTube channels earn between $1 and $7 million annually. Some people receive online royalties for music, self-published ebooks, photos and other intellectual property. Others may have a successful EBay account.

Thirdly, there are cryptocurrencies, such as BitCoin. While not yet an everyday encounter, many businesses now accept BitCoin. There are BitCoin ATMs where you can exchange Canadian Dollars for BitCoin, and some employers even give the option to be paid in BitCoin.

Lastly, there are personal digital assets. While they may not have a commercial value like the preceding three kinds of assets, these items generally carry emotional value. They include photographs, videos, emails, playlists, social media accounts and gaming accounts. Many of your memories are in a digital format.

Now consider how many of these items are password protected. How many of us have gone paperless and only receive statements and bills by email? How many of these accounts are tied to a credit card? What happens to these photos, assets and accounts if you are hurt or if you die?

There are ways to plan ahead. Make sure to create a hardcopy back up of photos and videos. You can save a list of accounts, passwords and security questions on a flashdrive, kept in a secure location. On certain accounts, such as Google and Facebook, you can appoint an Inactive Account Manager. Canada Post, in addition to many other online companies, market “digital safes” which can be accessed by appointed individuals at an appointed time. These days, it is important to craft an estate plan that takes into account your digital assets. Consider appointing a digital executor and leaving specific instructions on how to deal with your online assets, presence and history.

Look for my next article featuring tips for the executor dealing with digital assets. You can hear me speak on this topic on AM1150’s Audio Archive.

Nancy Ling is a lawyer with FH&P Lawyers. She can be reached at nling@fhplawyers.com or (250) 448-0527.