Technology has become an integral part of our lives and it is important to consider how you wish for your digital assets to be dealt with when making an estate plan.
In absence of a digital estate plan, your loved ones may find it difficult to manage your information after you pass away. Online accounts may be overlooked and funds held financial accounts may not become available to your beneficiaries. This could give rise to litigation due to inaccessibility or disputes about how they should be administered. Leaving accounts open indefinitely can also increase the risk of identity theft.
Digital assets include the following:
Online bank accounts, cryptocurrency and e-wallets (eg. PayPal, Apple Pay)
Intellectual property
Social media accounts (eg. email, Facebook, LinkedIn)
Subscriptions (eg. Netflix, Spotify, Audible)
Loyalty programs (eg. Everyday Rewards, Flybuys, Qantas Frequent Flyer)
Online shopping accounts (eg. Amazon, eBay)
Photos (eg. phone or iCloud)
How to make a digital estate plan
Creating a digital estate plan involves leaving a clear system for your executor to manage your digital assets after you pass away. You should prepare a list of all of your online accounts, including your usernames and passwords, and determine what you would like to be done with each account. The list should be stored in a secure place and updated when your account details change.
You may wish to consider a password storage tool to manage your account information, such as 1Password, Lastpass and Bitwarden. These are secure and effective tools for managing your passwords and provide your executor with easier access to your accounts. They also reduce the risk of security concerns if you were to write your passwords down on paper.
You will need to appoint a trusted person to act as your digital executor. This person will be responsible for managing your digital assets, distributing funds to beneficiaries and closing your accounts. A digital executor should be appointed as part of your Will, which deals with your real and personal property.
It is open to you to leave instructions about who you would like to receive your digital assets and how you would like your accounts to be dealt with. For example, you may wish for your social media accounts to be memorialised, or for someone to continue managing a particular account. You should ensure your instructions are consistent with the service agreements of each digital asset as some platforms place restrictions on how your accounts are managed after you die. For example, Qantas Frequent Flyer points are automatically cancelled on death and cannot be transferred.
It is important to create a digital estate plan along with your Will and Power of Attorney, however your digital estate plan should be separate to your Will. Your Will becomes public after you die so including detailed information in your Will can raise security risks. Having a separate document for your digital estate plan also means you can continue to update your plan as necessary without having to formally re-execute your Will.
We offer fixed fees to review your estate planning and can assist you with preparing your digital estate plan along with your Will and Power of Attorney. If you would like further information or wish to update your estate planning with us, please contact us today on (02) 6225 7040 or by email info@rmfamilylaw.com.au or get started now online.
Author: Amy Davis