It is a current trend that most people are now moving away from the world of paper and towards a more digital life, which in turn has created a new form of asset – the ‘Digital Asset’.
A Digital Asset refers to anything you own or have rights to that is accessed via the Internet or any other form digital technology.A digital asset does not only refer to an asset with financial value, they can also hold ‘personal’ and/or a ‘sentimental’ value to friends or loved ones.Some examples of a Digital Asset include:
online banking accounts;
social media accounts (e.g. Facebook, Twitter, LinkedIn);
online multimedia accounts (e.g. Itunes, YouTube)
shopping and business accounts (e.g. EBay, PayPal)
online photos and document storage accounts; and/or
domain names and websites.
It is important to note that the current legislation in NSW does not classify some of these digital assets as a form of ‘personal property’ and therefore they may not be included in the assets that form part of the residual estate in a Will.
The important question that arises with these new Digital Assets (as with any other asset) is, what will happen to the assets when a person becomes incapacitated or dies?
Some websites have policies providing their procedures when accounts are left dormant for a specific amount of time. For example, Yahoo will deactivate accounts that have not been accessed for 12 months.
Other websites, such as Facebook allow the option to create a “memorial page” from a deceased users account.
However, there are a lot of websites that do not offer these options and therefore, to ensure that these assets are not lost, we recommend that Digital Assets should now be specifically referred to and incorporated into your current Wills/Estate plans.
Failure to do so may prevent loved ones from being aware that these Digital Assets exist, and may also prevent the Executor from accessing and distributing the contents of the Digital Assets at a time of your incapacity or death.
Further, if Digital Assets are not dealt with correctly at the time of death, the information stored in these accounts could be lost forever, or be susceptible to identify theft.
What to Do:
It appears that to be abundantly cautious it will be necessary for your Will to include a clause that will give the Executor of your estate the necessary power/authority to handle and manage your Digital Assets, so that he/she is able to deal with and distribute them accordingly.
We also recommend that, in preparing your Will, you should provide probably a full inventory of (all your assets and including) your Digital Assets, (including where appropriate, all usernames, passwords and secret questions). This will ensure that the Executor is fully aware of all your Digital Assets and will be able to successfully access and manage them.
Due to the important nature of the information stored in such an inventory, it would be prudent that an inventory be stored in a sealed envelope separate from your Will.
The inventory (and your Will) should be kept in a secure place.
As you will know, some online accounts require your passwords and/or secret questions to be frequently updated, and in turn, your inventory must also be kept up to date. Although we do recommend that your inventory is updated regularly to comply with these requirements, we understand that this is not practical for most people as they run busy lives and do not have the spare time.
It is obviously important that we make sure that you are aware of all of these issues.