In Australia, estate planning has progressed beyond traditional wills and material possessions in an increasingly digital world. For those trying to secure their digital assets, the rise of digital assets — such as social media profiles, cryptocurrency accounts, and internet accounts — brings both new opportunities and concerns. The vital role that digital assets play in Australian estate planning will be discussed in this article, along with tips on how to easily include these assets in your estate plan.
The Role of Digital Assets in Estate Planning in Australia
Jameson Law recognises the significance of addressing digital assets in estate planning to ensure that individuals’ wishes are fulfilled and their assets are managed appropriately after their passing. For tailored advice, contact Jameson Law or call (02) 8806 0866.
Digital assets encompass a wide range of items, including but not limited to, online accounts (such as email, social media, and online banking), digital files (such as photos, videos, and documents), cryptocurrencies, websites, and domain names.
One of the initial steps in estate planning is identifying all digital assets owned by the individual. This may involve creating an inventory of online social media accounts and digital files, as well as documenting any cryptocurrencies or other digital investments. See the ATO’s guidance on crypto assets.
Unlike physical assets, digital assets are often protected by passwords, encryption, or other security measures. Therefore, it is essential to establish a plan for managing access to these assets in the event of incapacity or death. This may involve creating a digital asset register that lists each asset along with login credentials and instructions for accessing them. Consider platform tools such as Google’s Inactive Account Manager and Apple Support resources for account access Apple Support (AU).
Estate planning laws in Australia are evolving to accommodate digital assets. It is crucial to work with legal professionals who are knowledgeable about these laws and can help ensure that digital assets are properly addressed in wills, trusts, and other estate planning documents. See general information from NSW Trustee & Guardian.
Digital assets may contain sensitive personal information, and access to them must be managed carefully to protect privacy and security. Estate planning strategies should include provisions for securely transferring digital assets to designated beneficiaries as digital executors while minimising the risk of unauthorised access. See the OAIC privacy rights and eSafety guidance.
Assets can sometimes be passed through the Will as gifts. However, financial accounts where you do not have the right to transfer, such as PayPal accounts, are not able to be gifted. These assets are typically handed to family members. Most wills indicate that assets not specifically mentioned called “residual assets” these can be distributed to the spouse or immediate family of the departed. If there is no will, the decision falls on the family to decide how the devices with sentimental value will be managed.
By addressing digital assets in estate planning, individuals can ensure that their wishes are respected, their assets are properly managed, and their loved ones are provided for after their passing. Working with experienced legal professionals like Jameson Law can help navigate the complexities of integrating digital assets into comprehensive estate plans in Australia.
Incorporating Digital Assets into Your Estate Plan
Incorporating digital assets into your estate plan in Australia involves several steps to ensure that your online accounts, cryptocurrencies, and other digital possessions are accounted for and managed according to your wishes after your passing.
Take Stock of Your Digital Assets
Make a thorough inventory of all of your digital assets first. This includes digital files that may be held on external storage drives (pictures, movies, documents), cryptocurrency, websites, domain names, and online and bank accounts (email, social media, online banking, etc.). Useful security tips are available at Scamwatch.
Choose a Digital Executor
You may want to include a digital executor designation in your estate plan or will. After your passing, this person will be in charge of handling your digital assets, which will include gaining access to online accounts, transferring ownership of digital assets, and keeping up or shutting online profiles in accordance with your wishes. For help drafting, speak to Jameson Law.
Provide Access Information
Keep a record of all the login credentials, encryption keys, PINs, private information, and passwords for your digital assets. Using a reliable digital password manager or storing the data in a physical place (such as a safe deposit box), keep this information safe. Ensure that your designated digital executor is capable of retrieving this data when required.
Update Legal Documents
Review and update your will, trust documents, and power of attorney to specifically address digital assets. Work with a knowledgeable estate planning attorney who understands the legal implications, as well as privacy laws, of digital assets in Australia and can help ensure that your estate plan reflects your wishes regarding these assets.
Consider Steps to Ensure Security
Take steps to protect the privacy and security of your digital assets both during your lifetime and after your death. This may include setting up two-factor authentication on important accounts, encrypting sensitive digital files, and providing clear instructions for handling digital assets in your estate plan.
Communicate Your Wishes
Discuss your digital estate plan with your loved ones and your chosen digital executor. Make sure they are aware of your wishes regarding the management and distribution of your digital assets, and provide them with any necessary guidance or instructions.
Regularly Review and Update
Just like with traditional estate planning, it’s essential to regularly review and update your digital estate planning as needed. This includes adding new digital assets, updating access information, and revising instructions and legislation for managing your digital estate.
How can passwords and barriers impact Digital Assets In Wills?
The terms of service of almost every digital service provider also have clauses prohibiting the sharing of passwords. This may also apply to assets that are not themselves digital but require digital access (eg an online financial account, email accounts, PayPal accounts).
The ban on sharing passwords can prevent the executor from accessing digital accounts, even though the will says that digital documents are part of the estate. In other words, while your executor (the person executing your will) may need access to your email, they do not have the official authority to do so.
Pending legislation, testators may initially consider documenting their digital assets and recording and storing each account’s information in a secure location for digital platforms. Family members may also be informed of answers.
They may also specify in their will that the testator has access to the testator’s information. It is important for testators, for example, family members, to be aware of where you can find information about accessing an account and instructions for handling each of the assets.
Thus, it is important digital assets are dealt with responsibly by a trustworthy testator as issues can occur such as identity theft or loss of funds.
Get Help Planning Your Estate Now
Jameson Law has experienced professionals who can assist with the planning of your estate. Start a confidential discussion at jamesonlaw.com.au/contact/ or call (02) 8806 0866.
