With the prevalence of technology and ever increasing uptake of online services in today’s digital age you should consider the importance of digital assets and digital information in your estate and succession planning.
Unlike other countries, Australia has not legislated for the access to digital assets upon death or incapacity, which as a result has created increasingly difficult and lengthy processes for individuals to gain access to their loved ones’ data and digital assets.
What follows is an overview of Digital Assets Access upon Death or Incapacity of the user.
Digital Presence
Recent trends show that individuals and businesses are embracing technology and have gone online in ever-increasing numbers. User-friendly features such as larger screens on smartphones and easily enlarged small text on multitouch tablets have notably enhanced people’s ability to join the digital sphere.
Most individuals and businesses are now using online banking services due to the wide range of services available to them.
Furthermore the concept of an “heirloom” has also taken on new meaning in our digital world. The precious family photo album or the shoe box full of snapshots taken over the years is now more likely to be stored on mobile phones, computers and social media accounts like Facebook and Instagram, as well as the Cloud.
From social media to on-line stock trading, the surge in individuals and business alike which have a personal, professional or financial presence online and the scale of their involvement has created millions of intangible digital assets.
Due to the flexibility of the cloud service and its ability to eliminate many of the complex constraints from the traditional computing environment, including space, time, power and cost, there has been a progressive movement by individuals and businesses to move to the cloud.
Reasons for Digital Estate and Succession Planning
There are major consequences of not making provision for your digital assets and digital information. Your executor in respect to your personal estate or successor of your business may not have access to the passwords for online bank and investment accounts. In the event of incapacity, they may not even know about the existence of share options that are about to expire. In the context of a business, your successor may not be able to access accounts, pay suppliers or contact customers when adding provisions in your succession planning documents can mitigate these issues.
Worse still, in the absence of any appropriate provisions in your succession planning documents litigation may arise involving the rights of your successor to access your digital assets. For example, in the US, Yahoo! was faced with litigation after it refused to give the family of a Marine killed in action access to his email account to create a memorial in his honour. Yahoo! initially refused the request on the basis that their terms of service stated that the contents of a user’s email account terminated upon death with no right of survivorship and no transferability. Other digital providers are now taking into account post death instructions into their terms of service, which may not be in line with the testator’s Will.
Ownership or a License to Use it?
While some formal guidance on this matter is clearly warranted, there are obvious, and complex, issues for legislators to wrestle with in the course of considering the issue of the proper management of a deceased person’s digital assets. These include matters of intellectual property and privacy law, as well as debates about licensing and ownership of digital assets.
The problem of ownership and licences normally arise in Property Law, where your digital assets can be withheld from other people using it but also can be transferred to another person. However, normally these rights are allocated to “service providers” who ultimately own this asset due to the service agreement in place. Therefore this asset may not be your “property”.
Post Death Instructions with Digital Accounts
Over time, service providers have amended or failed to amend their Terms and Conditions to provide for post-death access to digital accounts and points systems. This has been commonly seen in Twitter and other social media accounts as well as services like ITunes and Flyer Rewards Programs.
a) Twitter
Like many other social media accounts, a Twitter account may be deactivated by the executor of the Deceased (https://help.twitter.com/en/rules-and-policies/contact-twitter-about-a-deceased-family-members-account). However, this does not necessarily mean that it is an easy process. In order to deactivate a Twitter account you must provide Documentation as proof of death. The various documentation includes a copy of the death certificate, applicants photo ID and some sort of Letter enclosing the account holders username.
b) ITunes
At the moment, there is no option to transfer an ITunes account to another upon death of an account holder. This is so because Apple’s fundamentals condition (in which we have all most likely accepted) states that your account and all platforms involved with Apple is non-transferrable (https://www.apple.com/legal/internet-services/terms/site.html).
This is because you do not necessarily own your ITunes account, rather you have a licence to use it and to withhold it from use by others. All music, videos, movies and podcasts downloaded from the ITunes platform are most definitely not your property therefore they most likely cease to exist upon death.
c) Flyer Rewards Programs
Over time, you may accumulate many flyer points however the question is, what happens to these points that you have accrued? As per the Frequent Flyer Terms and Conditions effective as at 13 March 2018 (https://www.qantas.com/au/en/frequent-flyer/discover-and-join/terms-and-conditions.html), Qantas states that upon death of an account holder the account will cease to exist by way of notification of death. Therefore any points that you have accumulated cannot be transferred to another Frequent Flyer Account.
In comparison, the Virgin Velocity system operates slightly differently. Virgin’s Terms and Conditions (https://www.velocityfrequentflyer.com/content/TermsConditions/) allows an account holders executor to become their ‘Authorised Representative’ which means they will be able to operate their account by way of proof of death and a valid document stating that they are their executor (i.e. a Will). Upon death, the Authorised Representative is able to redeem or transfer these points to another Virgin Velocity Account within 12 months after the Member’s death. If the Authorised Representative fails to do this within 12 months, all points will cease to exist.
Effective Digital Asset Management Plan
Pending the development of legislative guidance or clear case law, it seems the most sensible action is also the most practical. Ensuring you have an effective digital asset management plan might involve:
- making a list of your digital assets and online accounts, including every website on which you have an online presence;
- ensure instructions given to the digital service provider and their service terms are known to your trusted advisor;
- making a record of the user names and passwords to each account, including answers to any security questions which will allow for the password to be bypassed or changed. This information will be kept separately from your Will, perhaps in a safety deposit box or in a sealed envelope to be stored with your trusted advisor and updated from time to time;
- ensuring your Will contains a specific clause to allow for your executors to access some or all of your digital assets (as defined in your Will) which refers to where the full list and password information can be found. You may also consider appointing a separate ‘digital executor’ who is more comfortable with technology; and
- drafting explicit instructions on how you want your digital assets to be dealt with. This will involve, for example, consideration of whether you really want family reading your personal emails or accessing other personal information, or whether you simply want all online accounts to be deleted.
Digital Estate and Succession Planning
The existence of digital assets and the idea of leaving a digital legacy is a new frontier. If therefore you are bequeathing a digital asset such as a family photo album you should clearly specify the digital asset in your Will or any succession planning documents. If such digital asset is held outside your estate in say your family discretionary trust then specific directions should be provided to the trustee(s).
Furthermore passwords and instructions on how to locate the digital asset should be specifically stated and left in a safe place for people such as your executor and successor to locate.
In this respect Appendix A has been provided to help you assess what digital information you may own, as well as how and to whom you may wish to bequeath those digital information or leave instructions on how to access that digital information.
With these simple steps in place, you can begin to effectively manage the digital assets of your estate allowing you to really “log off in peace”.
Many other essential hot topics for business owners is all found in the book Nobody Else’s Business. Nobody Else’s Business is about helping business owners live the life they want to live, now and in the future. It is the ultimate guidebook for succession planning of modern Australian businesses.
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