Why are Digital Assets important?
Within just a few years, digital assets have become important in many areas of
our lives. We must plan for what happens to our digital assets on death or when we lose mental capacity, for a number of reasons:
Financial Value; such as PayPal accounts, virtual bank accounts, online gaming accounts; bitcoin; photographs; popular domain names or online businesses;
Sentimental Value; in this “digital age” personal assets such as photos or emails may not be in physical form, instead they may be stored on a smartphone, a flash drive, an online photo sharing website, a cloud storage server or a social networking account. If you die or lose mental capacity and no one can control or access these treasured memories, the emotional impact on family and friends can be significant.
Privacy & Confidentiality; private information that other people should be restricted or prevented from seeing. For example, email or Facebook accounts may reveal the existence of relationships or interests that are not widely or otherwise known.
Identity Theft; recent statistics estimate that more than 20 people have their identity stolen through online hacking every minute of every day. When you die or lose your mental capacity, you are no longer monitoring the use of your digital assets, and so the risk of identity theft is greatly increased.
Computer technology and the Internet are recent innovations compared to the ancient laws relating to Wills and powers of attorney. In the 20 or so years since personal computers have been mainstream, they have caused a fundamental shift in society and the way that information is stored and accessed. That information represents many different types of assets.
For many people, their digital presence has become inextricably intertwined with the rest of their life – and while this especially applies to younger people, all of us are affected by these new technologies and the associated convenience.
Most Australians (and even most lawyers) have not yet considered the monetary or sentimental value attached to digital assets. Overlooking digital assets during the estate planning process increases the likelihood that an estate’s administration will be complicated and subject to litigation due to the inaccessibility of digital assets or disputes regarding how they ought to be administered.
Digital assets pose a unique set of challenges within the context of estate planning.
The people in our lives may not always be aware of the extent of our online presences, and surviving friends and family members may overlook digital assets that have financial or sentimental value unless details are shared within a digital estate plan.
Failing to address the issue of digital assets within an estate plan can leave your executor with the daunting task of attempting to piece them together. It may also result in complete inaccessibility of some or all digital assets or lead to significant expense in attempting to regain access.
Some overseas jurisdictions have now begun to introduce legislation to address the legal issues arising as a result of the prevalence of digital assets and the inadequacy of the typical estate plan in addressing them. Australia has not yet enacted legislation to provide guidance on how to administer or distribute digital assets. Without any default rules relating to the treatment of digital assets on death, proper estate planning is crucial in avoiding any delay, expense or conflict relating to these assets.
What should be done?
Contact a lawyer who specialises in estate planning and who has knowledge of digital assets, who will help you:
- Make an inventory list of your digital assets, to provide your representative (agent, executor, personal representative, guardian, attorney, etc) with details of these assets and where to find them.
- Appoint a representative – someone you can trust if you are mentally disabled or die – and tell them what you want to do and achieve.
- Make sure your representative knows how to access your accounts and passwords in a secure and appropriate manner.
- Make sure the appointment is effective – different providers and terms of service agreements have different requirements.
Rod Genders is a world authority, international author and lecturer on Digital Assets. In 2013 he founded and continues to chair the London-based international Society of Trust & Estate Practitioners’ Digital Assets Working Group. He has given papers and presentations to senior lawyers, accountants and financial planners in Miami Florida in August 2014, and Hong Kong in November 2016, in addition to numerous presentations in his home state of South Australia.
At Genders & Partners, we make it a priority to stay current with the ever-changing laws on Digital Assets. Your Wills and estate planning lawyer in Adelaide will handle your estate planning process with the utmost professionalism and compassion to ensure that your assets and your family are protected.
To claim Your FREE 15 minute Telephone Consultation call us on (08) 8212 7233 today and learn how we can help you and yours.