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27 July 2023

What is a digital Will? There could be a fortune at stake

Last will image

In the age of digital abundance, the question arises: what happens to your online assets when you’re no longer here to manage them?

A digital Will holds the key to unlocking a potential fortune, but not all digital assets have material value, as photos, movies, emails, writings, even blog posts are digital assets that have great value to individuals and families.

With the advent of digital currencies, also known as cryptocurrencies, non-fungible tokens (NFTs), and other digital assets, there’s a good chance that just like with other long-term investments, their worth and existence may outlive their owners, their location, and their worth – leaving beneficiaries scrambling to understand the extent, and scope of digital assets.

But what exactly is a digital Will and how does it work?

What is a digital Will?

In the age of digital footprints that sprawl across myriad online platforms, the concept of a ‘digital Will’ has emerged as a crucial tool not just for the tech-savvy individual but for all of us.

Unlike traditional Wills that distribute physical and financial assets, a digital Will caters to one’s digital legacy, encompassing everything from social media accounts, blogs, and emails to digital currencies, online investments, and virtual property. Digital Will instructions ensure that these intangible assets, often imbued with sentimental value or monetary worth, or both, are given or managed according to the individual’s wishes.

In a world where our digital presence often survives us, having a digital Will is not just a nod to contemporary realities, but a chance to create a lasting legacy not just around our photos and other records left behind, but around our own digital likeness and image, and how and by whom it may be used in the future.

A digital Will is distinct from a Will that has been created and digitally uploaded (such as a Will created and digitally signed, or a video Will, both of which are rare and not recommended). Whilst there have now been cases of these kinds of Wills being admitted to Probate, they are classified by the Court ‘informal’ Wills as they do not conform to the specific requirements of the Wills Act 1970 (WA). Informal Wills come with a greatly increased burden of proof that it is in fact a proper Will, and attendant risk and costs of proving the same. If you have made a Will yourself (digitally), you should seek advice to ensure that it is valid and does not revoke any physical Will you have made.

What is the purpose of a digital Will?

A digital Will often does not stand alone but runs parallel to a physical, formal Will. The digital Will fulfils the purpose of ensuring that digital assets are included within estate planning documentation – and that the appropriate assets are distributed according to the final Will and instructions of the Will maker.

Digital assets very often escape the normal scope of estate planning and are not properly considered when drafting Wills and other estate planning materials to ensure they are fully captured and dealt with. Given how much of our lives are now online, this is an increasingly essential part of modern estate planning.

What are the advantages of a digital Will?

A digital Will ensures your digital and online assets are distributed after you pass away. It affords several advantages.

1. Give clarity in digital asset distribution

A digital Will specifies who will receive which digital assets, ensuring your online valuables, like cryptocurrency or domain names, go to the intended beneficiaries.

2. Protect your intellectual property

For writers, artists, and other content creators, a digital Will can dictate how their digital works should be managed, archived, distributed or monetised.

3. Ensure continuity for online businesses

If you operate an online business, a digital Will can provide clear direction on how the venture should continue or whether it should be liquidated, and how to maximise its value.

4. Ensure personal data security

A digital Will helps prevent unauthorised access or misuse of personal data by ensuring accounts are only accessed, managed, or closed as per your specific wishes.

5. Preserve your digital legacy

With a digital Will, you have a way to guide how your personal online content (like blogs, photos, movies or social media profiles) should be handled –whether that is archiving, memorialising, copying and distributing to certain people or organisations or even deleting entirely.

6. Avoid financial loss

If you have any assets with monetary value, such as an online bank account, eCommerce account, cryptocurrency or royalties of digital intellectual property, a digital Will ensures they are not overlooked and are properly accounted for and given to the right beneficiaries.

7. Protect sentimental value

Everyone has digital photos, videos, or personal emails to loved ones, whether online or stored in the cloud or in a phone, tablet or computer and a digital Will provides a way to distribute, or otherwise deal with these sentimental items.

8. Give instructions for digital currencies

With the rise of cryptocurrencies, a digital Will is crucial to ensure these assets are not lost and are distributed as intended.

9. Reduce potential legal conflicts

By providing clear directives for digital assets, potential disputes among heirs or beneficiaries about these assets can be minimised.

10. Protect your online reputation

By guiding the management of online profiles and content, a digital Will can ensure your digital reputation and your image or likeness and your digital legacy remains untarnished after death or if you lose mental capacity and can no longer make decisions yourself.

11. Give guidance for Executors

A digital Will offers a clear roadmap for Executors or digital heirs on how to access and manage digital assets, making their task more straightforward and less stressful. WIthout such instructions, digital assets may simply be lost in the ether forever.

13. Achieve more comprehensive estate planning

A digital Will complements traditional Wills, ensuring that all aspects of your life, both tangible and intangible, are thoroughly accounted for.

Are digital Wills valid? What are the requirements?

The short answer is yes, they are, in so far as they are an enforceable record of your instructions.

But like any legal document, there must be a few key legal parameters satisfied for it to be a legally binding document.

Like a traditional physical Will, in order to be considered a legally valid Will, certain formal requirements must be fulfilled by any digital Will:

  • The Will must be in written form.
  • It must be signed by the Will maker demonstrating their intention that the document represents their Will and contains their testamentary wishes.
  • The signing of the Will should take place in the presence of at least two witnesses, who are also required to sign the document.

These checks are necessary to ensure that the document will be legally binding before a court of law. In practice, a digital Will forms an annexure or part of a regular, physical Will.

What kind of assets can you include in a digital Will?

The main advantage of a digital Will is that it allows you to be very specific about what digital assets you want to deal with, and how.

Some of the types of assets that a digital Will can include are:

  • Digital accounts: email accounts, social media profiles, online banking accounts, cryptocurrency wallets, and other digital platforms.
  • Intellectual property: copyrights, trademarks, patents, and any other intellectual property rights.
  • Media: digital photographs, videos,writings and manuscripts, music files, and any other digital media.
  • Digital currencies: Bitcoin, Ethereum, and others.
  • Digital assets: online investment and financial accounts, digital stocks, and bonds.
  • Loyalty and reward programs: air miles, rewards, or loyalty program memberships.
  • Digital art and collectibles: digital art pieces, virtual collectibles, or NFTs.
  • Digital documents or websites: any digital documents stored on cloud services, including contracts, licences, deeds, or any other legal or important records.

 

Risks when creating a digital Will

When creating a digital Will, there are several risks you’ll want to avoid.
One of the main risks is creating a Will is that it is not legally valid because it does not comply with the formal requirements of a Will. In reality, our digital lives have moved much faster than the law in this area, and the law is yet to catch up.

Also, with the digital world quickly taking on new dimensions with the speed of artificial intelligence adoption, scammers and ill-intentioned people who would wish to interfere with the equitable distribution of assets now have more tools at their disposal than ever before.

With online fraud becoming increasingly common, it’s more important than ever to ensure that your final Will and (whether digital or not) is secure and legally binding.

In order to escape the possibility of confusion, legal challenges, or family conflict, getting appropriate legal advice in the drafting and execution of diverse estates that include digital assets is highly recommended.

Emerging trends and considerations

As digital assets become part of our everyday lives, and grow in number, complexity, and scope, managing the risks that arise from their inclusion within estate planning processes and in their distribution is more important than ever and will continue to be front and centre for all modern estate planning.

For example, digital products and services bought and held in online spaces like the Metaverse need to also find a home following their owner’s death. The transfer of ownership of such digital assets presents a challenge for beneficiaries who may not have an online identity, let alone the hardware to hold such assets.
Looking ahead, digital identity management, artificial intelligence and ethical and privacy concerns will all play a big role in shaping the future of estate planning.

Safeguard your digital legacy

Whether you’re a digital native with stash of Bitcoin, or a traditionalist with only a hard drive full of family photos, properly managing your estate requires skill and expertise to ensure the legality of your Will and its proper execution.

Contact our team of experienced Wills and estates lawyers today for a free 15-minute consultation, and entrust the proper management and legal validity of your digital assets to professionals who understand the intricacies of digital Wills.

Morgan Solomon is one of the State’s leading succession lawyers. His legal experience spans over 20 years and works with clients to navigate and resolve complex Wills and estate planning and probate, inheritance issues, estate disputes and litigation and business succession. He also has a wealth of experience in general commercial law. Morgan is adept at making clients feel at ease no matter the situation they are in, working with them delivering smart legal strategies and working hard to find fast and equitable outcomes.