This article was written by Grace Blake Solicitor at W & G Lawyers.
As society becomes increasingly digital, estate planning needs to evolve with it.
A modern estate can extend far beyond the traditional assets we think about when preparing a Will. Today, a person’s financial and personal affairs may include online share trading accounts, cryptocurrency, digital bank accounts, cloud-stored photographs and documents, social media accounts, online businesses, intellectual property and valuable digital records.
But what happens to those assets when you die?
The answer is not always straightforward.
Having a Will that deals with your assets is important, but your Will alone may not provide your executor with everything they need to locate, access or manage your digital assets. Different online platforms have different terms and procedures, and some digital assets may be subject to contractual or access restrictions.
This is why digital estate planning should form part of your broader estate planning strategy.
Legal Ownership Does Not Always Mean Practical Access
One of the key issues with digital assets is the difference between owning an asset and being able to access it.
For example, you may legally own cryptocurrency, shares held through an online trading platform, or files stored in a cloud account. However, your executor may not automatically have access to the relevant account simply because they have been appointed under your Will.
Similarly, some digital accounts are governed by terms of service that regulate whether an account can be transferred, closed or accessed by another person after the account holder’s death.
A carefully prepared estate plan should therefore consider not only who is entitled to an asset, but also how your executor or beneficiaries will identify and deal with it.
What Are Digital Assets?
Digital assets can take many forms, including:
- Cryptocurrency and digital wallets;
- Online share trading and investment accounts;
- Digital bank and payment accounts;
- Superannuation and investment accounts accessed online;
- Domain names and websites;
- Online businesses and e-commerce accounts;
- Digital photographs, videos and personal documents;
- Cloud storage accounts;
- Intellectual property and digital content;
- Royalties and income from digital platforms;
- Social media and email accounts;
- Online subscriptions and memberships; and
- Digital records relating to a business or professional practice.
Some of these may have significant financial value. Others may have primarily sentimental, personal or practical value.
Either way, they should not be overlooked when preparing an estate plan.
1. Maintain a Secure Digital Asset and Access Log
One of the most practical steps you can take is to maintain a separate, secure record of your important digital assets.
This record should identify the accounts and assets you have, where they are held, and how your executor can locate the relevant information.
For security reasons, your passwords and private security credentials should generally not be included in your Will. Instead, consider using a secure password manager or another appropriately protected system.
Your digital asset inventory should be reviewed and updated regularly, particularly when you open or close accounts, acquire cryptocurrency, establish a new online business or change your access details.
2. Make Sure Your Executor Knows What Exists
A Will may appoint someone as your executor, but they cannot administer assets they do not know about.
Consider leaving your executor practical instructions identifying:
- Your significant digital assets and accounts;
- The platforms or institutions where they are held;
- Where relevant access information is securely stored; and
- Your wishes about whether particular assets should be transferred, sold, retained or closed.
This is particularly important for cryptocurrency and other digital investments, where access may depend on specific security credentials.
3. Don’t Forget Your Digital Personal and Business Assets
Some digital assets may have significant financial value, while others may have enormous personal or practical value.
Think about what should happen to your:
- Digital photographs and videos;
- Cloud-stored documents;
- Social media and email accounts;
- Websites and domain names;
- Digital intellectual property; and
- Online business accounts and records.
The terms and conditions of individual platforms may affect what can happen to an account after death. For this reason, your digital estate plan should complement, rather than replace, your Will.
Your Digital Assets Should Form Part of Your Estate Plan
Your Will is an important part of your estate plan, but it is only one part.
A comprehensive estate plan should consider your digital assets alongside your property, investments, superannuation, insurance and business interests.
Taking the time to identify your digital assets and provide your executor with practical guidance can help reduce uncertainty and make the administration of your estate easier for your loved ones.
How W & G Lawyers Can Help
At W & G Lawyers, we can help you ensure your digital assets are properly considered as part of your broader estate plan.
We can assist you to:
- Prepare or update your Will;
- Identify and address issues relating to your digital assets;
- Ensure your estate planning arrangements work together with your superannuation and insurance nominations; and
- Provide practical advice to help your executor administer your estate as smoothly as possible.
If your Will has not been reviewed recently, or your digital and financial affairs have changed, it may be time to review your estate planning arrangements.
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Disclaimer
This article is general information only and does not constitute legal advice under Australian law. For advice specific to your situation, please contact W & G Lawyers. For further details, please click here to view our disclaimer.