Chris Forrest- Partner and Principal Adviser
Sovereign Wealth Partners
Who owns your digital assets when you die?
You might even ask, what are my digital assets?
Digital assets can include anything you have online. Examples include your iTunes account, eBay account, Amazon account, emails, social media accounts, cloud storage, Paypal account and cryptocurrency (of course). In fact, any data you store online is an asset, financial or non-financial.
If you haven’t thought about the digital ramifications of your estate you have a lot of company. Conventional estate planning is well neglected by many Australians and statistics are worth a look before considering your approach to your digital life.
A study by Charles Sturt University and the University of Adelaide into estate planning in Australia found most adult Australians are underprepared for death and woefully underprepared for a health event which leaves them disabled or incapacitated. The extensive survey uncovered some key statistics indicating how little Australians understand the importance of estate planning.
45% of Australians do not hold a current Will (with a further 30% under development or in need of updating)
59% of Australians have not provided a directive (such as power of attorney or enduring guardianship)
60% of Australians with children have not nominated substitute guardians
63% have no life insurances
74% of small business have no succession plan
The study also highlighted a severe deficit in understanding how trusts and other structures operated in the event of death, including by those that hold key positions within these structures. These are worrying findings which indicate that some people may be leaving their assets at risk when they die and certainly leaving themselves at risk in the event of a disability or illness.
Your Digital Life
You may not realise just how much of your life is online until you make a list.
In an era which is exponentially transforming from paper to digital storage, digital assets are growing at a significant rate and may in time, for some, outweigh their physical assets. In fact, the study uncovered that around 82% of Australians have at least one form of digital asset. This will only grow and, with the advent of My Health Record^ in October, this is likely to be sooner rather than later.
Legislation has not kept up with the rise of digital assets. Your beneficiaries may find, for example, that they cannot transfer the music or e-books you purchased online. Reading the fine print of the provider, you may be surprised to find that you have bought the right to read the book or listen to the music on your account but not transfer it to another owner. An example which some may find surprising is that Facebook owns all your posted content after your death. (That said, you might use Facebook Archive, Facebook Memorialisation or simply delete the account).
The message is clear – get your estate planning in order and have a digital strategy.
A digital strategy might include:
- Keeping a list of all your digital accounts and passwords recorded and storing them somewhere secure with the location known by a trusted agent (e.g. solicitor, executor, personal representative). You might also consider an encrypted online service to store your passwords. They should not be listed in your Will since many people may get to see your will after you pass. A more structured approach is a digital register where your instructions may be kept with your Will but this concept is only in its formative stage;
- Keep a list of all your computer devices that may contain sensitive digital data and your wishes with regard to the stored data;
- Check the terms and conditions of your social media accounts to see how your account is treated upon death. Pay note to the jurisdiction in which the terms and conditions apply;
- Specify what digital items should be destroyed or transferred upon death or incapacity;
- Personal images, such as photos and videos, can be stored in multiple places to protect against loss e.g. cloud storage, home PC and DVD;
- Keeping your files up to date and clean out those you no longer want or need;
- Discuss your will and intention with your family to minimise the chance of something being missed as well as reduce the chance of dispute.
Digital estate planning is only going to grow as we become more aware of our digital footprint and more protective of those assets.
If you require advice, call Sovereign Wealth Partners on (02) 8216 1777 or email us at email@example.com
The Charles Sturt paper can be found here: https://www.step.org/sites/default/files/academics/Estate_Planning_in_Australia_Final_Report_021017V_2_051017.pdf
You might also like to read further on digital strategies here: https://accan.org.au/files/death_and_the_internet.pdf
^My Health Record is an Australian Federal Government initiative to put the Health record of all Australians online. Australians have the ability to opt out of this initiative by the 15th October 2018. You can learn more here: https://www.myhealthrecord.gov.au/