Digital Estate Planning is changing the way we prepare for our futures.
Estate Planning is the process of laying out a framework of instructions for how to handle and/or distribute your assets in the event of your death, disability, or incapacitation. The motivation behind it is the comprehensive care of your loved ones in the event you become unable to care for them yourself.
Traditional Estate Planning involves preparing a raft of legal documents including a Will, Enduring Power of Attorney, Advance Healthcare Directive, Insurance Plans, Living Trusts, and more. However, in the 21st century, all of us have a growing Digital Estate, and the traditional method of Estate Planning doesn’t cover Digital Assets.
The importance of Estate Planning can’t be understated. No matter your age, health, or financial position, it is the only way to have a say in the circumstances surrounding the end of your life. A solid Estate Plan protects against family disputes and frivolous litigation and stops the state from interfering in your final wishes.
So how does Digital Estate Planning come into it, and what is it all about?
The emergence of Digital Assets and the issues surrounding them has revolutionised Estate Planning. It’s no longer a simple process – we all live in a multifaceted, intertwining web of real and virtual property and possessions, some of which have real value and some of which do not – so Digital Estate Planning has increased in depth and complexity to encompass it all.
Because Digital Asset Management is a relatively new field, most lawyers will not have the knowledge or expertise to properly guide you through it. Traditional Estate Planning methods were never cut out to deal with things like cryptocurrency holdings, digital wallets, payment accounts, web domain ownerships, intellectual property stored online or on smart devices, rewards programs, social media accounts, and so on. For a simple series of zeroes and ones, Digital Assets carry a lot of value, and failing to properly protect them will cause issues for loved ones after your death (for example, in trying to access documents only stored online, or get money stored in digital wallets refunded).
The question then becomes – how do you manage your Digital Assets and include them in your Estate Planning?
It is very important to include your Digital Assets in your Estate Plan to protect against things like identify theft, online fraud, and other nightmarish scenarios. The good news is that there are lawyers knowledgeable in Digital Asset Management and all its complexity who can help you.
Digital Estate Planning is a constantly evolving field, but as technology races ahead, savvy Digital Estate Planners are keeping up with the changes and have developed ways of securing your Digital Assets for your future beneficiaries.
There are practical solutions such as printing online documents and storing them in security lockers or nominating heirs to access your information and accounts after you pass.
Facebook has put a lot of emphasis on Digital Estate Planning. They have developed an infrastructure for handling a deceased person’s Facebook account, such as options for memorialisation or giving the immediate family the right to deactivate and delete it.
Cryptocurrency is still a fraught area and solutions are still developing. There are issues with giving another individual access to your wallet or vault, and the very real possibility of losing access to the virtual funds altogether worries investors.
There are many other ways you can prepare your Digital Assets now and also leave clear instructions for after you pass away. Read our post on “Digital Assets – How Do I Include my Digital Assets in my Estate Planning?” for a comprehensive overview and solid head start.
There is no historical playbook for Digital Assets. Digital Estate Planners need to adapt and stay abreast of all the issues involved to develop a valid solution to the concerns involved.
The NSW Government Law Reform Commission is in the middle of reviewing Digital Estate Planning laws, conscious of the importance of controlling data after death. It’s a significant issue being taken seriously, with hopes that changes will serve as a precedent for other states to follow.
One final word – at OneWill, Digital Asset Management and Digital Estate Planning is our everyday reality. If you’re not sure where to begin, contact us and we can get you started on the right track.
