In the modern age, our lives are increasingly intertwined with digital assets. From social media accounts to cryptocurrencies, these assets often hold sentimental or financial value. But how do you ensure they are passed on according to your wishes after you die? In Victoria, including digital assets in your Will requires careful consideration. This blog explores how to gift your digital assets effectively while addressing challenges posed by their unique nature.
What are digital assets?
Digital assets can broadly be defined as anything stored electronically or accessible online. They may include the following.
Financial assets
- Cryptocurrencies (e.g., Bitcoin, Ethereum),
- Online payment accounts (e.g., PayPal); or
- Investment platforms.
Personal assets
- Photos;
- Videos;
- Email accounts;
- Social media profiles;
- Blogs and other online content; and
- Cloud storage files.
Business assets
- Websites;
- Domain names;
- Monetised social media profiles (e.g. Instagram and YouTube channels);
- Online stores; or
- Intellectual property.
Entertainment and subscriptions
- E-books;
- Music;
- Movies;
- Gaming accounts; and
- Streaming subscriptions.
It’s essential to identify and categorise your digital assets before incorporating them into your estate plan.
Challenges of gifting digital assets
Gifting digital assets involves unique complexities, including:
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Access and passwords
Executors need passwords, keys, or login credentials to access accounts. Without them, recovery may be difficult or impossible.
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Ownership vs. license
Some digital assets, like music and movie libraries, are licensed rather than owned, meaning they cannot legally be transferred (e.g. Spotify, Netflix, etc).
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Jurisdictional issues
Digital assets may be governed by laws in different states or countries, complicating their management.
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Service provider policies
Platforms like Google, Facebook, and Apple have their own terms of service regarding account access and transfer after death.
Steps to include digital assets in your Will
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Create a digital asset inventory
Start by listing all your digital assets, their values (if any), and how they can be accessed. Include account numbers, usernames, passwords, and recovery keys, but do not include this sensitive information in the Will itself, as Wills become public documents after probate.
Tip: in today’s age we are encouraged to change passwords on a regular basis for digital security purposes. Using a reputable password management system (e.g. LastPass, iCloud Keychain). These platforms have secure mechanisms for sharing content under strict guidelines.
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Understand legal and service provider requirements
Review the terms of service for each digital asset. Some platforms, such as Facebook and Google, allow you to designate legacy contacts or decide what happens to your account after death. -
Appoint a digital executor
In Victoria, you can appoint an executor to manage all aspects of your estate, including digital assets. However, you might want to specifically authorise your executor to access and deal with your digital assets, especially if they require technical expertise. -
Clearly state your wishes in the Will
Include specific instructions for how each digital asset should be handled. For instance: - Leave access to your family photos stored on Google Drive to a particular beneficiary.
- Direct your executor to sell cryptocurrencies and distribute the proceeds to named beneficiaries.
- Request the deletion of personal or social media accounts.
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Use a separate memorandum for detailed instructions
To keep your Will concise and protect sensitive information, consider creating a separate document, memorandum or Statement of Wishes that provides detailed guidance on accessing and managing your digital assets. While this document is not legally binding, it can be immensely helpful to your executor.
International and interstate considerations when dealing with digital assets in a Will
If your digital assets are stored or governed in other states of Australia or overseas, your executor may need to navigate different laws. For instance:
- Cryptocurrencies stored on international exchanges may require compliance with foreign regulations. You can read more detail on this topic in our earlier blog, “What happens to your crypto if you die or lose capacity?”
- Social media platforms headquartered overseas may have specific requirements for account access.
An estate planning lawyer with expertise in digital assets can help ensure your estate plan accounts for these jurisdictional complexities.
Tips for managing digital assets effectively
- Regularly update your digital asset inventory and password manager to ensure all information is current.
- Use platforms with robust legacy planning features, such as Google’s Inactive Account Manager or Facebook’s Legacy Contact.
- Discuss your digital asset plans with your executor and beneficiaries to avoid misunderstandings.
Why proper planning matters when dealing with digital assets in your Will
Without clear instructions, digital assets can be overlooked or inaccessible, potentially leading to lost value or unintended outcomes. Proper planning ensures your digital legacy is handled according to your wishes and spares your loved ones unnecessary stress.
Get help from an estate planning lawyer
Including digital assets in your Will is an essential part of modern estate planning. Whether it’s ensuring your family can access cherished memories or transferring financial assets like cryptocurrencies, careful preparation is key.
If you need assistance incorporating digital assets into your estate plan, contact a member of our team. We can guide you through the complexities to ensure your wishes are respected.
Contact David Davis Lawyers
Phone: 03 9014 1299
Email: admin@ddavis.com.au