A recent article published at Mondaq takes a thoughtful look at how existing legal structures are attempting to handle the evolution of digital assets and where reform is demonstrably needed. Access to digital assets on death or incapacity is a growing area of concern around the world, because while laws are typically clear on paper documents and physical property, in 2018 they are still unclear on digital assets.
The ever-changing realm of digital technology presents headaches for lawmakers around the world with the law playing catch-up for years. Most of us these days have a growing accumulation of digital footprints and digital assets. And for estate management as well as privacy reasons, there’s a real need for a clear legal framework to govern when a third party can access your digital assets in the event of your death or incapacitation.
The expression “digital assets” is very broad, encompassing everything including email accounts, blogs, gaming accounts, uploaded photos, Bitcoin or similar, social media accounts, documents held in cloud storage and so on—basically any piece of media or text that has been formatted into binary source and to which a person has ownership rights.
Experts’ advice is to plan for your digital assets as if they were a tangible asset to preserve your digital legacy and allow your legal and financial representatives to manage all aspects of your estate if you die or become incapacitated.
Such legal and financial representatives, who may include solicitors, financial managers, trustees, executors or administrators of estates, often need timely access so that they can properly conduct legal and fiduciary duties and manage the risk of financial loss and identity fraud.
Currently there is no law in Australia that directly addresses access to digital assets upon death or incapacity. However, at the instigation of the NSW Government, the NSW Law Reform Commission produced a consultation paper in August titled “Access to digital assets upon death or incapacity”, having the terms of reference of examining the laws that affect who can access someone’s digital assets on death or incapacitation, whether NSW needs new laws in relation to digital assets and what should such laws include. The closing date for submissions is 12 October 2018. Even if reform occurs in NSW, there remains the issue of uniformity of any new digital access laws across all Australia’s states and territories.
Because the digital world is cross border, the issue also needs international collaboration and many countries are addressing the need for reform. In the US the Revised Uniform Fiduciary Access to Digital Assets Act was enacted in 2015 while the Uniform Access to Digital Assets by Fiduciaries Act was enacted in Canada in 2016. The European Union is assessing whether the US and Canadian laws should be replicated in Europe.
Because so many of us around the world have so many digital assets, and because of their increasing worth, there’s a pressing need to determine how they should be treated in the event of our incapacity or death and to update current legal structures to remove restrictions and uncertainty.
Meanwhile, what can you do?
With many legal issues yet to be decided, people should aim to be proactive in including digital assets in their estate planning. Tips we find useful are:
- State in writing what you want to happen to your digital assets. Estate planning for incapacity and death should aim to first properly identify all the digital assets in question, so this step can be extremely helpful.
- Create a list of your accounts and which ones an executor should be able to access and which should be deleted. However, never list usernames or passwords in wills because they become a public document on your death. Instead, record access info for your accounts somewhere safely and provide instructions for your executor to be able to locate them. Password management software can be useful here.
- Have legal documents (wills, powers of attorney) prepared that allow your representatives (as far as can be under current laws) access to your digital assets upon your death or incapacity.
- Your executor should also be given instructions on how to access the value stored in digital media accounts (credits and purchases) and of course you should back up your media on external hard drives.
- Check with the companies owning the digital services you use to ascertain their policies on transferring assets on death or incapacity. For some social media accounts, such as Facebook, you can nominate a legacy contact which may make the job of your loved ones easier.
Please contact one of our experienced solicitors here at Alliance Legal Services on (02) 6223 2400 — we offer a free first conference.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Legal Services.
Source: Mondaq
