When people think about estate planning, they usually consider what they own, such as their home, bank accounts, investments and personal possessions. But what happens to the assets they control the ownership of, or which live on the internet?
From years of family photographs stored on iCloud, to social media accounts, cryptocurrency and frequent flyer points, our digital lives can hold significant financial and sentimental value. Yet, the ownership and or the control of these digital assets are often overlooked when making a Will.
Planning for your digital assets is vital to ensure that important information and assets do not become lost, inaccessible or overlooked and/or forgotten after your death.
What are Digital Assets?
Digital assets include almost anything that you create, own or access, whether stored on an App or otherwise, including;
- Social media accounts;
- Digital photographs or videos;
- Cloud storage and documents;
- Email accounts;
- Cryptocurrency and digital wallets;
- Online businesses and websites;
- Subscriptions; and
- Loyalty and frequent flyer points.
What happens to Digital assets when you die?
The days of waiting for a statement to turn up in the mail alerting your executor of the existence of a bank account, insurance policy or shares are long gone. The mere lack of a login to a deceased’s person’s computer is worse than not knowing where the key to their house is.
There is currently no single Australian law that comprehensively governs what happens to a person’s digital assets after death. Instead, the position depends on the nature of the asset and, in many cases, the terms and conditions of the platform or service provider.
This distinction is important.
For example, cryptocurrency can form part of your estate and be dealt with under your Will. By contrast, many social media, cloud storage and email accounts are provided under a contractual licence. The platform’s terms will determine what your executor or family members can access, download, transfer or delete after your death.
As a result, simply naming someone in your Will does not grant that person the ability to log into or control every online account you have.
Why should you include digital assets in your estate planning?
Without an effective plan, your digital assets may be impossible for your executor or loved ones to identify, access and deal with after your death.
This can mean:
- valuable assets such as cryptocurrency and financial investment are overlooked or irretrievably lost;
- important documents and information becomes inaccessible;
- subscriptions and periodical payments continue to occur and incur fees;
- online accounts remain active after your death;
- personal information is exposed or misused; and
- your loved ones are left with unnecessary stress and uncertainty at an already difficult time.
Cryptocurrency is a particularly apt example. Unlike a bank account, access to cryptocurrency may depend on a private key, recovery phrase or other security information known only to the Willmaker. If your executor does not know that the asset exists, or cannot locate the information needed to access it, the cryptocurrency may be effectively impossible to recover.
In fact, it has been estimated that around 4 million Bitcoin or approximately 20% of the total supply is now permanently inaccessible because owners have died without leaving the information needed to access their holdings.
How Do Different Platforms Handle Digital Assets?
Apple – iCloud, Photos and other Apple data
Apple allows its users to nominate a Legacy Contact, who can request access to certain date stored in your Apple account after your death.
The Legacy Contact will then need to provide Apple with the access code you create when they were nominated, and a copy of your death certificate. This provides access to photographs, messages, notes, files and device backups.
Google – Gmail, Google Photos and Google Drive
Google provides an Inactive Account Manager, which allows you to decide what should happen to your account if it becomes inactive for a period you specify.
You can nominate up to 10 people to be notified and choose whether particular types of data should be shared with them. Google also allows you to request that your account be deleted after the specified period.
Social Media – Facebook and Instagram
Facebook and Instagram allow their users to nominate a Legacy Contact to manage certain aspects of their account after death.
One option is to manage a memorialised account. This is an account that remains online as a place for friends and family to remember the person who has died. The Legacy Contact does not receive the deceased person’s password or unrestricted access to their account or private messages.
Alternatively, you can elect for the Legacy Contact to have the account permanently deleted after you pass.
Cryptocurrency
Cryptocurrency can form part of your estate and can therefore be dealt with in your Will. However, your executor may be unable to access or administer your cryptocurrency if they cannot locate the necessary access information, such as private keys or recovery phrases.
PayPal and online payment accounts
Most online payment accounts, such as PayPal require the executor or administrator of a deceased estate to provide documentation before it will close the deceased person’s account. This can include the death certificate, Grant of Probate or Letters of Administration and identification.
Any funds remaining in the account will then be transferred into the bank account linked to the PayPal account and can be distributed in accordance with your Will.
Frequent Flyer points – Qantas and Velocity
Frequent flyer points can have real value, but they are generally governed by the terms of the relevant loyalty program rather than being treated exactly like cash in your estate.
For example, Qantas allows an executor or administrator to request the transfer of a deceased member’s unexpired Qantas Points within 12 months, to an eligible family member, which includes a spouse, children, parents, siblings or any other blood relative.
What should you do?
The good news is that digital estate planning does not need to be complicated.
We recommend:
- Checking the platform’s policy
Digital platforms have their own rules about what happens to an account after its owner dies. Check the policies for the platforms you use and, where available, set up arrangements such as a Legacy Contact or account deletion preference.
- Making a comprehensive list of all your digital assets and accounts
Create and maintain an up-to-date inventory of your digital assets, including social media, email, cloud storage, cryptocurrency, subscriptions, and frequent flyer accounts.
Your inventory should contain enough information to allow your executor or another trusted person to identify each account and understand what you intend to do with it.
Using a dedicated password manager, such as 1Password, Bitwarden or iCloud Keychain allows you to centralise your usernames, passwords, recovery codes and other relevant access information. Many of these password managers also allow you to nominate a legacy contact, granting a trusted person the ability to request access to your protected information after your passing.
Whether you use a digital password manager or choose to record this information elsewhere, you must ensure your Executor is aware of where it is stored and how to access it.
We encourage our clients to ensure that our firm is made aware of the arrangements in place and that this information is securely stored with the original or a certified copy of your Will
A digital estate plan can work alongside your Will
Your digital estate may contain some of your most valuable assets, and some of your most irreplaceable memories.
A Will is an important starting point, but effective estate planning should also include what happens to the digital world you leave behind for the reasons referred to.
Taking the time now to identify your digital assets, review the relevant platform settings and securely record the information your executor will need to be able to properly administer your estate in accordance with your Will.
Let us ensure that the recommended outcomes referred to in this article can be achieved. Please contact our team today.
