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Special Counsel, Lucy Ferreira discusses the importance of managing digital assets.
In today’s digital age, the scope of a person’s estate extends beyond traditional assets like real estate, bank accounts, and personal possessions. Increasingly, a significant portion of wealth and personal information is held digitally.
Digital assets include everything from online bank accounts and investment portfolios to social media profiles and digital photo collections. As more aspects of our lives move to digital platforms, incorporating digital assets into a comprehensive succession plan is becoming essential.
“Incorporating digital assets into a comprehensive succession plan is becoming essential.”
Digital assets are any online or electronic records owned by an individual. These can broadly fall into three categories:
The nature of digital assets presents unique challenges during estate administration. Unlike physical property, digital assets can be difficult to locate and access, and without proper planning, these assets may remain inaccessible or lost altogether. Furthermore, many digital accounts are protected by passwords or terms of service agreements. Ensuring a smooth transition of these assets requires proactive planning.
Incorporating digital assets into succession planning ensures that:
The first step is to create a comprehensive inventory of all digital assets. This should include financial accounts, personal content, and business-related digital holdings. Each entry should list:
This inventory should be securely stored, such as with your lawyer or in a digital vault, to ensure executors have easy access and that it remains protected during your lifetime.
Different platforms have different policies regarding access to digital assets after death. Some accounts may be transferred or accessed by your family members, while others are strictly non-transferable. Reviewing these terms of service agreements is important to understand how each digital asset will be managed.
It is also essential to provide legal consent and access. Without specific permission, privacy laws may prevent even your digital executor from accessing your accounts.
Appointing a digital executor, namely a person responsible for managing digital assets after your death is best practice. The digital executor may differ from your general executor, particularly if they have the technical expertise to navigate online platforms and recover digital assets.
Ensure that your digital executor understands their role and has access to the necessary documentation and legal authority to act on your behalf. This may require specific clauses in your will to be included or involve the creation of a separate digital asset trust.
Since cryptocurrencies are often held in private wallets without a centralised governing body, failure to share keys or passcodes could result in permanent loss. Succession planning for these assets should include storing private keys securely, and ensuring your digital executor knows how to access and transfer these assets.
Like any estate plan, the digital asset plan should be updated regularly. As new accounts are created or existing ones are closed, it is essential to keep your inventory and instructions current. Passwords, in particular, may need frequent updating.
Some digital assets, such as personal emails or social media accounts, hold sentimental rather than financial value. Consider the legacy you wish to leave behind with these accounts. Would you prefer to have certain accounts memorialised, deactivated, or deleted. Many platforms like Facebook and Instagram offer settings to manage accounts after death, including options for memorialisation or deletion.
As the world becomes increasingly digital, ensuring that digital assets are explicitly and properly managed in your succession plan is important. A well-considered approach not only safeguards valuable financial holdings but also protects your personal digital legacy.
*The information provided in this website serves as a general guide and does not constitute legal advice. It is based on our research and experience at the time of publication. Please consult our knowledgeable legal team for any specific inquiries or advice relevant to your circumstances, as the content may not have been updated subsequently.
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