In this highly digital world in which we live, the use of digital assets and records has become part of our way of life, and their importance in business and our personal lives has increased. However, have you ever thought about what happens to these digital assets and records when you pass away or if you become legally incapable of making decisions for yourself? As part of your estate planning, and drafting of your Will and other testamentary documents such as Powers of Attorney, it is important to consider your digital assets and records, as well as any other assets you own, and their treatment upon your death or legal incapacity.
Due to the ongoing and continuous development of digital technology, the definition of what constitutes a 'digital asset' or 'digital record' is constantly evolving. A New South Wales (NSW) Law Reform Commission Report ("Report") on "Access to digital records upon death or incapacity", which was tabled by the NSW Parliament on 5 March 2020, refers to both "digital assets" and "digital records", and notes that:
- 'Digital assets' - "We only use the term "digital assets" to refer to digital material in which users have proprietary rights or interests" 1. Examples include digital photographs, digital artwork and cryptocurrencies2.
- 'Digital records' - "...encompasses digital assets, but also includes items not strictly the property of the user"3. Examples include social media accounts, digital music, online purchasing accounts, loyalty program benefits, and other online accounts4.
If a person holds digital assets and records, then it is likely that an authorised person such as an executor appointed under their Will to administer their estate or affairs in the event of their death or a person appointed under a Power of Attorney in the case of their legal incapacity, may need access to such digital assets and/or records. The procedure for accessing these digital assets and/or records however, varies, and can depend on the type of digital asset and/or record, the custodian responsible for them, the terms of applicable agreements with or policies of third parties, confidentiality requirements, transfer prohibitions, security and password protocols, applicable laws, relevant country, and so on. It is also important to note that some digital assets and digital records may cease or terminate from the moment a user passes away.
For instance, the terms and conditions of use issued by social media account organisations differ and upon the death of a user actions taken in respect of a deceased user's account can include:
- working with certain people only, such as a person authorised to act on behalf of a deceased user's estate or a verified immediate family member in relation to the account;
- memorialising the account such that the account remains online as a legacy but is not active;
- deactivating and removing the account upon notification; or
- transferring the account.
Many digital assets are also password protected and therefore, in order to enable an authorised person to access your digital assets it is important to ensure passwords are kept up to date and stored securely. Relevant information may also be provided with your Will or other testamentary documents.
Certain countries around the world have now implemented schemes or laws dealing with issues associated with access to a deceased or incapacitated person's digital records. For instance, the Revised Uniform Fiduciary Access to Digital Assets Act 2015 in the United States of America, and the Uniform Access to Digital Assets by Fiduciaries Act 2016 in Canada. In Australia, a nationally consistent scheme regulating access to a deceased or incapacitated person's digital records was recommended by the Report but has not yet been implemented5.
1 New South Wales Law Reform Commission Report 147, "Access to digital records upon death or incapacity",
December 2019, para 1.15, p 3.
3 New South Wales Law Reform Commission Report 147, "Access to digital records upon death or incapacity",
December 2019, para 1.14, p. 3.
5 New South Wales Law Reform Commission Report 147, "Access to digital records upon death or incapacity",
December 2019, para 6.55- 6.69, p 81-83.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.