“Digital wealth” constitutes a far greater proportion of our estates than many realise, with our personal and business lives becoming increasingly digitalised and online.
Yet a survey for the NSW Trustee and Guardian found 83 per cent of Australians have not discussed what will happen to their social media accounts when they die and only 3 per cent of Australians with a will have given directions regarding their social media accounts.
Digital wealth needs to be included in estate and succession planning, so that on death or incapacity assets are protected and this wealth is dealt with tax effectively.
Even if you do not own an online or virtual business, this digital wealth may have the ability to produce income or be sold, but will be of no value if nobody knows it exists. Not to mention potential sentimental value where the account includes photos, memories or messages.
Its expanding net covers: online or virtual businesses, which may own goodwill or intellectual property including copyrighted materials, trademarks and code; social networks including Facebook, Instagram or LinkedIn; email accounts; blogs and domain names; music, photos and files stored online or in clouds; online accounts such as PayPal; access to financial accounts and cryptocurrencies; and hardware including computers and tablets.
Complications may arise on death due to differing account terms and differing international laws.
For example: you want to gift videos or photographs in your Will, but it depends where they are stored: if saved on a digital device such as your iPad, you can simply gift the device; if saved in the cloud, the provider’s account terms determine what happens to them.
Digital rights differ greatly from one provider to the other:
- Facebook accounts can be memorialised or permanently deleted. Content cannot be changed unless the deceased added a legacy contact. If an option is not chosen, Facebook’s standard policy is to memorialise the account.
- Instagram accounts can be memorialised, but accounts can only be removed by family members who prove they are an immediate family member. LinkedIn only offers profile removal, deleting connections, recommendations and endorsements.
- iCloud accounts are non-transferable and rights to your Apple ID or content terminate upon death. You may leave login details for loved ones to retrieve photos and other sensitive information. If not, a court order may be required, which will prove difficult and expensive.
Australia has no specific legislation yet for digital estate and succession planning or managing digital wealth. Families have no clear rights to access a deceased or incapacitated family member’s digital assets and accounts.
Without password and login details these assets can remain locked away or online indefinitely. Even with a password you may be in breach of the service provider’s terms when using that information.
There is no easy answer, but the following is currently considered best practice:
- Traditional estate and succession planning, which also covers digital wealth. This involves reviewing asset ownership and structures, proposing solutions to problems, and seeking buy-in from beneficiaries to lessen disputes later due to beneficiaries not understanding what was done and why.
- Share a list or secure location of digital accounts and wealth with trusted family members, kept securely and separate from passwords to avoid security breaches. It should not be included in the will, as the will becomes a public document if and when probate is granted.
- A letter of wishes may provide direction. This letter could cover: accounts to be closed, deleted and/or content erased; material to be downloaded and gifted to named individuals; accounts to be archived and saved; credits, points or cash values to be redeemed and transferred to particular people; and online businesses to be shut down.
- Incapacity needs to be considered, as dealing with digital wealth and social media accounts may be more urgent than on death. Account policies are often less clear on incapacity. Enduring powers of attorney should define digital assets and digital accounts, and include powers allowing the attorney to deal with them. While the power of attorney’s jurisdiction only covers Australia, it may make an account provider in a different jurisdiction more likely to accept the attorney’s authority.
- Wills should define digital assets, digital accounts and include powers for executors and trustees to deal with them.If there is significant digital wealth in other jurisdictions consider local wills and the equivalent of enduring powers of attorney in each jurisdiction, with a global Australian will covering the worldwide estate other than that situated in these jurisdictions. This may not be strictly legally required, but can facilitate the process and possibly lead to a better tax outcome.
With significant digital wealth an option could be to hold it through a trust structure separate to your estate for improved tax and asset protection outcomes. Your will must deal with who the shares in a trustee company (if there is one) should pass to and you also need to deal with succession to the office of the appointor of the trust (if there is one).
Regular reviews at least every three years, and when there is a significant change in circumstances, are important given how quickly the digital arena is changing.
James Whiley is a special counsel in the Hall & Wilcox private clients practice www.hallandwilcox.com.au
Tag: digital wealth
When will Digital Death go mainstream in Israel?
You may not relish thinking about you or your family suffering from injuries or illnesses in the future, yet you have an insurance covering these very options, right?
The possibility of your untimely death is not something you enjoy thinking about, yet you make a will just to be on the safe side, correct?
The probability of you or your loved ones dying is not something you like thinking about, yet you sit down with your spouse, children, siblings or parents, and discuss your digital legacy, assets and estate, just as a precaution, true?
Oh, you don’t?
Let me guess why: Because you haven’t thought about it yet.
That’s OK, I didn’t think about it either. Neither did my brother before he was killed when he was hit by a car on March 2, 2011.
The term “Digital Death” refers to the digital legacies, assets and estate the “modern deceased” leave behind, of both financial and sentimental value. It’s everything you have digitally created and stored: Offline in files, pictures and videos in your computer, tablet or smartphone, and online in emails, social networks, cloud storage services, online banking accounts, virtual shops and others.
While we may not be old or wealthy enough to accumulate many physical assets, we probably are internet savvy enough to accumulate digital assets (How many online accounts do you use? How many do the younger members of your family use?).
Dealing with physical assets of the deceased is something we already know how to do: We have legislation, legal precedence and social norms to guide us, as well as experience gathered over a long period of time. This is not the case with digital assets, however. There is no legal precedence in Israel (and only a few in the world), no local social norms and no Israeli legislation.
As this is a relatively recent phenomenon, there is very little personal experience as well – but that’s going to change, soon. The number of people dying with no one but the deceased knowing neither where he or she stored all this digital wealth nor their usernames and passwords, is growing exponentially.
In the United States, five states currently have Digital Death legislation, and 18 are in various stages of catching up. Each state is struggling to define its own solution, to various degrees of scope and success, as there is (as yet) no Digital Death Uniform State Laws or Federal Law.
In Israel? There is none.
International internet providers such as , , , , and LinkedIn clearly publish their policies regarding posthumous access online.
of the Israeli ISPs whose policies I have been checking on a regular basis since 2012 publish a policy regarding posthumous access to the accounts of their users: Netvision 013, Bezeq International, , Internet Rimon, Café TheMarker, and Israblog (which is now defunct – another form of digital death to all the content stored in it). Even the ISPs that actually have a clear posthumous policy and procedure, such as , don’t publish it online. I gathered their varying policies one by one (they are detailed in my blog, here: Technical Guide), as a service to the public. Some Israeli ISPs policies might surprise you with how easy – or how difficult – it will be to kin or heirs to gain access to accounts of deceased relatives or loved ones after their death.
As the awareness of the importance of Digital Death grows, people are encouraged to manage their digital assets ahead of time. Even the USA.gov blog posted about it.
In Israel? Using an online solution to manage your digital assets, as it is done outside the text of an official will, shall have no legal validity (according to Israeli Inheritance Law and Regulations, Chapter 1, clause 8a). Israel allows only one will and only in one format: Pen on paper (clause 18-20 in Chapter 3: Inheritance by Will, Article one).
Is the most unbearable scenario of all for you that in which people go through your private, personal stuff after your death? Even loved ones, or especially loved ones? That’s understandable, as we all cherish our privacy while we’re alive. Do we also cherish our privacy after our death? Some international ISPs – like – and some Israeli ISPs – walla!, Netvision or Bezeq International – will release the content of your email account to your kin or heirs.
So you should manage your digital assets regardless to what your wishes are: there are no right or wrong choices, only YOUR choices vs. choices made by outside factors, such as the changing policies of the various ISPs.
Do you remember that horrible moment when the technician lifted his or her gaze and sadly, not quite looking you in the eyes, told you your hard drive is lost beyond repair and with no hope of recovery? Remember that hollow feeling in the pit of your stomach when you realized your phone or tablet was stolen, with irreplaceable pictures and videos inside it? How about that time your house was broken into and your computer was stolen with invaluable data in it?
Now multiply those feelings with the pain of losing a loved one, and then multiply the data lost from that one occasion or one lost device with the loss of everything the recently deceased had stored digitally for the past who-knows-how-many-years, and you’ll get a glimpse of what families of the modern deceased are going through.
So, if you are using the Internet, manage your digital assets, legacy and estate, just like you would manage your insurance or will.
If you are a lawyer, advise your clients to manage their digital estate.
If you are an Israeli internet provider, have a clear posthumous policy and publish it online prominently.
If you are the Israel Defense Forces, add Digital Death data to the personal data you have soldiers fill in on their recruitment forms.
If you are an Israeli authority, put in place regulations for Israeli ISPs and adapt legislation to suit our age of technology.
Let’s not wait for the local version of sad stories such as Justin Ellsworth, Benjamin Stassen or to stir you into action. Let me be your wake up call.
Expert knowledge, 101
Who said that knowledge is gold?
Considering the time you spend online, it appears that you are building a digital wealth. For example, on services like Quora or StackOverflow, you are truly building a online expert, who can be recognized by thousands of followers and build strong relationship with some.
Contributing to coding projects, as your GitHub account enables you to do, also makes you an expert in a field where only a few people are experts. Consider the code you might have left on GitHub. Do you want it to be part of your online estate?
In all these case, you have been building an identity that made you a reference as well as a network of relationships. You’ll have to spend some time to think about the becoming of these assets after your departure. Do you want to close the accounts, erase your information, or let it be for some time accessible to everyone looking for knowledge?
You’ll have to be sure to write clear instruction the the becoming of your social network accounts. They can be deleted, left as a memorial, or curated : it’s up to you.