Digital Assets

We are a society that has embraced the digital age and along with that, we have accumulated digital assets.  Social media, emails, music, videos, photos, books, crypto currency, streaming services, Supermarket and store loyalty cards and airline miles are just some of the examples of digital assets that the majority of us would have or, at the very least, be aware of.

Most of us would have at least one (likely more) of these subscriptions on our smart TV, smart phone, computer or Ipad and, more likely than not, the passwords are automatically saved to our devices so we don’t forget them.

How many of us have clicked ‘I agree’ or ‘I consent’ to the terms and conditions of a digital service without having actually read them?

How many of us realise that having an email account, a steaming service or a social media account is more than likely by way of a service agreement whereby you have purchased a ‘licence’ to use the service but don’t actually own anything.     

With these service agreements there are usually significant privacy restrictions (which we would know if we’d read the terms and conditions properly).    This usually means we are restricted in who we can share our passwords with (think Netflix or Stan).  It is unlikely then that we would be able to set out all our passwords in our Will or even leave a list of passwords in an envelope stuck to the back of the will without breaching some or all of the terms of agreements we have entered into with these providers. 

So what happens when we pass away or lose mental capacity?   How do our loved ones get access to this digital data and assets?    More importantly, can our loved ones legally gain access?

Facebook provides us with the ability to nominate a legacy contact if our account is memorialised upon death, however they cannot log into our account, read our messages or remove friends or send new friend requests.  

Other service providers such as Yahoo, have made it clear in their service agreement that a Yahoo account cannot be the property of an estate.    

Qantas’ position is that any frequent flyer points not yet redeemed or transferred to another family member will be cancelled effective from the date of death.

Policies like this can make it difficult for Executors of estates to access digital data and, particularly where there are digital assets, deal with them in a timely and cost effective manner.

At present the Executor of a deceased estate has to make an application to the Court for an order compelling the likes of Facebook or Yahoo to provide access to the digital data.  Not only is this time consuming and costly, as there is no legislation in place, there is also no guarantee the Court will make the order in any event.

The NSW Law Society wrote to the NSW Law Reform Commission when the Commission was undertaking a review of this issue in 2018 and raised a number of issues that it believed would need to be factored into any legislation being considered.

This included ensuring that digital data and digital assets were properly defined and categorised to ensure they were recognised within existing legislation such as the Succession Act 2006, as well as determining who was an authorised person to be able to access relevant data upon the death of a person.  

Their letter can be read in full at https://www.lawsociety.com.au/sites/default/files/2018-09/Letter%20to%20NSW%20Law%20Reform%20Commission%20-%20Access%20to%20digital%20assets%20upon%20death%20or%20incapacity%20-%2019%20June%202018%20%281%29_0.pdf

Whilst Countries like the US, Canada and the United Kingdom have taken some steps towards addressing this issue, it is clear that a lot of work still needs to be done before it becomes the norm for digital data and digital assets to be recognised as part of an Estate and for our Executors to deal with is as they would any other asset under the terms of the Will here in Australia.

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