The 3 Vital Steps to Building a Digital Estate Plan | OneWill | Estate Planning Simplified The 3 Vital Steps to Building a Digital Estate Plan | OneWill | Estate Planning Simplified

The 3 Vital Steps to Building a Digital Estate Plan

Everyone should have a Will, even if they think they don’t have many assets. If you’re reading this and you don’t have a Will yet, check out our posts on The 4 Fundemental Steps to Drafting a Legally Binding Will and The Other Things to Consider when Drafting a Will.

But of increasing importance in this digital age is the need for a Digital Estate Plan – a plan for the collection and distribution of our Digital Assets.

What Are Digital Assets?

Digital Assets are things you own that have value but that only exist in digital form.

There are two main categories of Digital Assets:

  1. Data such as documents, images, audio, video or other similar properties, stored digitally on a device such as a computer, laptop, tablet, mobile device, or server; and
  2. Digital Profiles such as email accounts, social media accounts, online shopping accounts, forum profiles, or any other online account containing personal information. Of note is that you can derive value from what the account gives you access to (for example, online financial accounts).

The “Data” category is fairly easy to understand, because even though a thing may only exist as a series of zeroes and ones on a hard drive, it is still a “thing” and recognisable as a discreet unit.

The “Digital Profiles” category gets a little trickier and has much broader scope. Examples of Digital Profiles can include:

  • Banking and other financial accounts, including share portfolios
  • Cryptocurrency holdings, ICOs, or other blockchain investments
  • iTunes or Amazon Prime accounts, Spotify or Audible accounts and eBooks
  • Australian Government Department of Human Services account or online Private Health accounts
  • Reward programs, e.g. Qantas or Virgin Velocity frequent flyer accounts, hotel memberships, FlyBuys points
  • Social Media profiles like Facebook, LinkedIn, Instagram, Snapchat, etc
  • Online shopping accounts such as PayPal, eBay, Amazon, or Gumtree
  • Websites or forums that you own or manage

What happens If you don’t have a Digital Estate Plan?

If you pass away without a Digital Estate Plan in place, it can cause problems for those you leave to handle and distribute your Estate.

Digital laws are not tightly controlled, and legislation doesn’t exist to cover every aspect of digital life. In some cases, the only applicable laws are the terms and conditions published on a provider’s website, which the provider can change at whim. A great example comes from Facebook. Have you ever received a notification of a “Friendversary” or the birthday of a person you know to be deceased? One Oxford study calculated that there could be up to 5 billion deceased members by 2100.

All of these users will have things of value – their photos, videos, and written words – stored on Facebook’s servers. These things belong to their Estate and should be distributed to their beneficiaries. But without a Digital Estate Plan in place, they may stay floating in the Cloud forever.

It’s particularly important for anyone with financial assets stored digitally, particularly any cryptocurrency. If you don’t have a Digital Estate Plan in place along with stored credentials for access, your loved ones could lose access to the money and it will be gone forever.

The 3 Vital Steps to building a Digital Estate Plan

1. Make a List

This is probably the most arduous part – making a complete list of all your Digital Assets.

Look at the examples above and think about the two categories. Do you have assets in these categories? Some you can think of straight away – your Facebook profile, your Gmail account, your Dropbox storage – but others may not be as obvious.

Along with what the asset is, write down the access information associated with it such as email addresses, usernames, passwords, and 2FA backup codes.

You’ll need to keep this updated whenever you sign up to a new service, and in reality you will probably need a few goes at completing it as you remember things later. So keep it somewhere you won’t lose it!

2. Who and What?

 pivotal role in your Digital Estate Plan is your Digital Executor. This person, like your normal Executor in your Will, will be responsible for carrying out your wishes as outlined in the Plan.

Next, you need to think about what you want done with each of your Digital Assets. For example, do you want your Facebook account to be memorialised? Do you want your LinkedIn profile to be removed? Make sure you clearly note this in your Digital Estate Plan.

There are other less obvious decisions to make. For example, do you want to immediately close your eCommerce store, or do you want all the stock sold off first?

It’s important to go through the whole list and make a choice about every item – who gets it, and/or what gets done with it.

3. Store and Update!

Your Digital Estate Plan will contain sensitive information that could cause a lot of damage in the wrong hands. Store it securely, and make sure your Digital Executor will have access when the time comes.

You should make mention of your Digital Estate Plan in your Will, but you shouldn’t make it part of your Will. This is because the Plan will need to be updated regularly as you gain some assets, drop some others, or change your passwords on a regular basis (like we all should). Changing your Will every time you change your Netflix password will become a real hassle.

Digital Estate Plans for Business Owners

If you own a business that has an online presence – and let’s face it, what business doesn’t these days – you should create a separate Digital Estate Plan specifically for the business. Because of the additional regulations around business ownership and succession planning, it’s recommended to keep it separate from your personal Digital Estate Plan. This way, your business may be able to carry on without you and without confusion, debate, and legal challenges.

Feeling a bit overwhelmed? It’s not surprising! OneWill has developed a solution for Digital Estate Planning that makes it a lot easier. Check it out here.