Whether you already have a Will or are thinking about preparing one, you have likely considered how you would like your physical assets such as property, vehicles and your personal belongings to be managed after you pass away. But have you considered what will happen with your digital assets?
As technology becomes increasingly integrated into everyday life, people are relying more heavily on digital platforms and services. From online banking and social media accounts to cryptocurrencies and digital subscriptions, the assets we accumulate in the virtual realm also hold signficant financial and sentimental value. Without appropriate planning, your valuable digital assets may become permanently inaccessible or difficult for your Executor to locate and manage.
Digital assets encompass a broad range of online and electronic possessions, and can typically be divided into two categories: those with sentimental value and those with financial value.
Sentimental value assets include digitally stored memorabilia such as photographs, videos, social media accounts, messages, emails and other online correspondence that may hold great personal value.
Financial value assets encompass digital assets with commercial value that attract intellectual property rights, advertising revenue or that can be traded, exchanged or redeemed for cash. They include online currencies such as Bitcoin and other forms of cryptocurrency, domain names, online investment portfolios, online payment services including PayPal and Afterpay, money from online shopping accounts (Amazon, eBay, Etsy), digital music files, monetised social media or video channels earning advertising revenue (YouTube), frequent flyer points and rewards programs like Flybuys.
Cryptocurrency is one of the most signficant examples. The currency is stored virtually on a blockchain and can only be accessed and dealt with digitally. For an Executor to deal with cryptocurrency once someone passes away, they must know where to locate the asset’s private key (a unique code used in cryptocurrency to authorise transactions) and prove ownership. If the private key cannot be found, the cryptocurrency may be permanently lost.
The main issue with digital assets is they are often overlooked when administering an Estate. An Executor may not realise the person who has passed away owned cryptocurrency or held valuable online accounts or investment portfolios unless they were specifically informed.
One of the simplest ways to avoid this issue is to create a digital asset inventory. This document should include account details, usernames, passwords, private keys, storage locations and access instructions. The inventory should then be stored securely alongside your Will in a safe location known to your Executors.
Using a secure password manager can also assist by safely storing login credentials and ensuring a trusted person can access them when required. In addition, it would also be worthwhile reviewing the policies of individual online service providers, as not all digital assets may be transferable after you pass away.
It is also important to consider digital assets when preparing a Power of Attorney, so that your Attorney can access and deal with them on your behalf, particularly in circumstances where capacity has been lost.
If you are thinking about preparing or updating your Will or Power of Attorney, our experienced Estates Team can provide advice on how best to manage digital assets as part of your estate planning and ensure your documents are appropriately drafted according to your wishes.
