A digital asset can loosely be described as any item held in a digital format which a person holds a right over. Some examples of what constitutes a digital asset include bank accounts (not including the money in the account), cryptocurrency, websites, photos, social media accounts, and software.
There is no legislation at the moment in Australia which addresses the change of ownership of digital assets after death. But, given the prevalence of digital assets, it is increasingly likely that legislation will be put into place in the future.
The law in this area is still under development, and it is therefore vague as to what assets can be gifted under your Will.
Currently, you are able to gift digital assets such as funds in online accounts (PayPal), but not email or social media accounts. As your Will may come under more open scrutiny following your death, your Will should never include any private login information or any passwords.
If you do have digital assets of significant value, you should seek advice from an estate planning lawyer to investigate options to ensure that they pass to your intended beneficiaries. Given the nature of digital assets often being primarily contractual rights from service providers, some effort may be needed to understand the underlying contractual terms.
Digital assets can be of significant value, whether it be sentimental value or monetary value.
In some circumstances, you may want to gift access to your digital assets to certain beneficiaries in your Will, such as access to photos stored in the cloud. Or you may want to ensure that any private information stored in a digital format is destroyed following your passing.
It is vital that you have provided instructions as to how you want your digital assets to be dealt with upon your death. This can assist your executors in identifying what digital assets you own and then distributing those assets in accordance with your instructions, including closing accounts where applicable.
There are a number of things that you can do to prepare for dealing with digital assets.
Compile a list of your digital assets and how you would like them to be dealt with following your death. This will be a reference point for your executors and where necessary reference to the digital asset may be made in your Will.
Otherwise, the list will assist your executor in identifying the assets to be dealt with. It would be good if the list was updated regularly too and you ensure your executor is aware of the list and how it can be accessed.
Having your digital assets valued can be a time saver for your executors upon your death and can make for a more timely distribution to your intended beneficiaries.
For those digital assets having a commercial resale value, this at least identifies its value at the time of making your Will although that value would need to be updated as at the date of death. It will also identify those digital assets that may have no or limited commercial value.
Some digital platforms such as some social media platforms do not allow for the transfer of ownership and instead require that you put in place a legacy contact. This means that following evidence of your death being provided, an access key is provided to the person you have nominated for access.
You may need to carefully review the policies and service agreements of your social media accounts to better understand their legacy provisions regarding access to your accounts upon your death. Equally, often social media platforms have an automated deletion provision upon your death if this is what has been nominated by you, or it may apply by default.
That is an obvious one, but it is also important that your executors or your nominated beneficiary know how to find those passwords following your death. It can be helpful to use an online password manager where some details can be shared with trusted users, or emergency access can be provided to a selected person (for example, your executor).
There are a number of matters that may impinge access to digital assets upon your death.
If a digital asset is unable to be accessed following your death, in some cases, a court order may be needed for access which can be timely and expensive.
Dealing with digital assets in your Will can be more intricate than a simple Will. Our estate planning team are able to guide you on how best to deal with your assets, including your digital assets.
For more information or to arrange a consultation with a lawyer, you can call or email us.
This article is of a general nature and should not be relied upon as legal advice. If you require further information, advice or assistance for your specific circumstances, please contact E&A Lawyers.
When you meet with our expert lawyers they'll be ready to provide advice.
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