No doubt you’ve heard it before – the importance of having an Estate Plan prepared so that when you are no longer around, your assets can be distributed to your chosen beneficiaries in an efficient and tax effective way. However, are you aware that there is a major part of your life that most people are forgetting about? That could be forever lost in cyber space? These are your ‘Digital Assets’.
In our increasingly technological world, more and more of our ‘possessions’ are becoming digitised. Anything that you own or have rights over that exists online, on a computer, a phone etc. is classified as a digital asset. This includes your:
- Computer and mobile
- Email accounts: Gmail, Outlook, Bigpond etc.
- Social media sites: Facebook, Instagram, Twitter, Linkedin
- Shopping accounts: Ebay, Amazon
- Bill payment accounts and online banking: NAB, Netbank, PayPal, BPAY etc. As more and more services provide electronic bills and statements, paper trails are disappearing and it is harder than ever to trace.
Your digital assets can have either sentimental value or monetary value.
Photos are a great example of digital assets with sentimental value. The truth is, photos are no longer stored in boxes at the back of your cupboard, but are on your computer, in your email, even on your Facebook account. Would you want these photos to be lost after you’re gone, or do you have loved ones who would appreciate them?
An online business or blog could be a digital asset with monetary value. If it cannot be accessed, it can build up debt, lose advertising revenue and cause many other inconveniences. Providers have their own terms and conditions and you may find there are tedious legal proceedings you must carry out in order to gain access or it may be unattainable. Leaving information on how to access and maintain these sorts of sites can provide direction and ease for the person taking over.
Additionally, being unaware of usernames and passwords for banking and payment accounts can make it extremely difficult for executors to sort out an estate. Useful information may be hidden in emails or on computers that could assist your executor if they’re aware of it. Making this information available to them can ensure that you are leaving them with minimal work and the ability to quickly and easily sort out your estate. Obviously privacy is a key consideration and this may not be appropriate for all accounts.
A great way to start planning is to first make a list of all your digital assets. Once you start thinking about it, you’ll be surprised how many there actually are. Then, consider what you want to happen to these assets. For example, you may wish for certain photos to be given to different relatives, access to your emails provided to your partner, some documents on your computer deleted and not made public etc. Where you keep this information is up to you. It may be advantageous to keep it with your Will or alternatively, leave usernames and passwords separate but in the care of trusted friends or family.
By planning what you wish to happen to your digital assets, you have the ability to make your own choices so that when you are no longer around, the valuable assets can be passed on and access to any sensitive information will be provided to the right person, or securely deleted.
As the concept of digital assets is relatively new, there are currently no well-defined laws assigned to the transfer of these accounts. However, as an ever growing and increasingly valuable form of property, it is a consideration we will all need to face. The issue isn’t just restricted to ‘older generations’ either, as unfortunately the young can also leave this world before their time.
While preparing your Estate Plan, keep in mind that your digital assets should be an additional discussion. Everyone will have their own preferences and thoughts, however digital assets are here to stay and deserve your consideration.
Source: Capstone Financial Planning