digital estate planning and managing your digital assets

Digital estate planning: what happens to digital assets when you die?

Author – Peter Allsopp

Where are your digital memories stored?

When recently widowed Rachael Thompson went to the Apple store to get help unlocking her husband’s iPhone to access family photos, she didn’t expect the process would take three years and a legal fight. After her husband Matt’s sudden death, Rachael discovered that he hadn’t made a Will. Although Rachel was entitled to his estate under intestacy, without a Will leaving his digital assets including digital media, she needed a court order to unlock his phone or access the account containing all the photos of Rachael, Matt and their six-year-old daughter.

Do you know what your digital assets are?

These days most people have a growing number of digital records or digital assets. There is a technical difference, but the terms are often used interchangeably. Assets could include:

  • websites and blogs
  • social media accounts and profiles
  • email accounts
  • cloud storage accounts including photos, documents, contact lists
  • online accounts and loyalty programs
  • online banking accounts and apps, and
  • cryptocurrency.

If you are a small business owner or sole trader, some of the accounts in your name might be ones you operate for business purposes. If you die or become incapacitated, some may need to be closed, while others may need to continue. Your family and personal representatives would need to sort all of this out.

What happens to digital accounts after death?

Many of us haven’t planned our digital estate or stipulated what should happen with our digital assets. The problem Rachael faced is not uncommon. Nor is the issue unique to Apple. Providers may deactivate or delete accounts when a user dies, or if they have been inactive for some time. Other cases have involved bereaved family members attempting to access social media accounts, or trying to recover important documents saved online or in cloud storage accounts.

Unpacking the legal challenges

The New South Wales Law Reform Commission recently considered the challenge of dealing with a person’s digital assets when they die or become incapacitated. The report, tabled in March 2020, recommended the government enact legislation to allow an “authorised person” to access someone’s digital records if they died or became incapacitated.

Until such legislation is passed, the situation is complex. While there are some options, none solve the issue entirely.

Listing your digital assets

One of the first problems an executor may face is just knowing which accounts exist.

Listing all your account details — usernames, passwords and related log-in information — in some form of digital register is a good start. To keep account details secure, this list needs to be separate from your Will, since Wills become public documents once probate is granted.

However, this may not completely solve the problem. Under their terms of service, providers may close or lock accounts when an account holder dies. Just having a list of accounts and passwords would not give the executor or family the right to operate those accounts, and sharing passwords may breach terms of service.

Addressing digital assets in your Will

Accessing files on a locked device without authorisation could be a criminal offence in NSW. It is not clear whether a general power under a Will to deal with personal property would be sufficient authorisation to access or modify data on the device.

It is important to specifically state in your Will how you wish digital records to be dealt with, and by whom.

Checking provider policies for your accounts

Providers including Google and Facebook, and now Apple, are starting to enable users to nominate someone else to look after their account.

If you have important contents stored online, you may be able to set up a legacy contact. If you do this, make sure any provisions in your account are consistent with what you have said in your Will.

Keeping a backup

While cloud storage is convenient, it may also be valuable to keep an offline copy of important records. Some platforms allow you to download a backup of anything posted to the account and save it to a hard drive.

A word on cryptocurrencies

Cryptocurrencies can be left to a beneficiary. However, the way these currencies are set up, there is no authority who can grant access to the currency unless the user has shared their private key. If you trade cryptocurrency assets that you wish to bequeath, you should leave instructions and include a list of any relevant passwords with your Will at your solicitors.

Digital estate planning advice

If you are not sure what happens to your digital assets, you are certainly not alone. The NSW Law Reform Commission report notes that 60% of users rarely or never read the policies or terms of use for online sites or apps.

If any of your life or business is online, it’s important to think about how you would like that dealt with when you die or if you become incapacitated. Do you want family members to have access to photos, email, websites, important documents? Making a list of account details is a good start, but might not be enough to ensure accounts can be dealt with according to your wishes. This is one area it really pays to get advice.

Peter Allsopp is a solicitor in our wills and estate planning practice. As well as experience in wills, trusts and estate law and legal drafting, Peter has made a study of smart contracts, and distributed ledger technology including blockchain and cryptocurrency. He has written for legal publisher, LexisNexis and is an assessor at the College of Law.


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