Have you made plans to protect or pass on your digital assets – financial and personal – after you die? If not, you’re in good company. Most Australians don’t know they are at risk of losing all their online chattels if they are killed or incapacitated.
That’s because they could take their secret passwords to the grave, have their assets locked away in perpetuity by social media networks or exhumed by digital grave robbers and sold on to the dark web, an online “netherworld” for trading illegal and stolen goods from identification to drugs and guns.
An estate planning report last year by Charles Sturt University and The University of Adelaide found that of Australians who had digital assets, just over 70 per cent had made no contingency plans for them. “This is a major cause for concern as legislation regarding digital assets and their transferability or access by executors or beneficiaries on death is non-existent in Australia as it is in most jurisdictions,” the report said.
Baby Boomers, who have grown up and old with digital technology, are the richest generation in the nation’s history and will be passing on trillions of dollars in assets over coming decades. There is more than $400 billion worth of property owned by people in their 80s and hundreds of billions of dollars in shares, bank accounts and other assets.
But financial assets such as PayPal accounts, details of share trading accounts and financial institution accounts, bitcoin, photographs, potentially valuable domain names or online businesses could follow their owners into eternity without trace, or ownership pass on to online providers.
“These valuable social media and digital financial assets are at risk,” warns Anna Hacker, national manager of estate planning for Australian Unity Trustees.
Digital assets cover anything from images to multimedia files, videos, music, blogs, online records, games that have monetary and/or sentimental value to the creator or successors.
“Facebook pages, YouTube comments and other social media will live on after we die, a trend that will only increase as social media becomes more entrenched in our everyday lives,” Hacker says.
Investors in Bitcoin and other types of cryptocurrency, such as Ethereum, Litecoin and Ripple, could routinely be taking their profits to the grave because they have failed to provide a third party with details of their account.
It typically happens because they die intestate (without a will), having been killed in an accident or other unforeseen incident.
“Ownership of digital assets is a difficult legal area, as legislation and the social media platforms themselves have struggled to keep up with developments, but it is nevertheless an area that should be considered in your estate planning,” says Hacker.
Within decades the number of accounts set up by people who have since died is expected to exceed the number of those owned by the living, creating some complex legal issues and a potential treasure house of assets and data.
Geoff Stockton, a former senior police officer, has set up Personnel Risk Management Group and PharmacyID to advise private companies and public service on verification of identity.
Stockton is currently advising a large superannuation fund on strategies to defend accountholders’ assets from attacks by global cyber crime gangs that are constantly looking for weaknesses.
“This is already a big problem and will only get bigger unless people realise how vulnerable they are and take steps to protect their assets,” Stockton says.
Cyber gangs are targeting bank accounts, superannuation funds or stealing the identities of the living – or dead – for their driving licences, health care cards, bank loans or passports.
Current “specials” on the dark web include fake Victorian driver’s licences that can be delivered by courier within 36 hours for $160 and a Commonwealth Bank of Australia credit card statement for $5. A-made-to-order Victorian driver’s licence and Medicare card with a hologram stamp, clear window in the middle and embossing can be delivered in a “standard stealth package” within 30 days for about $600.
Last year there was an 80 per cent increase in identity theft compared to the previous year, according to the recent Black Economy Taskforce final report, which estimates it to be worth about $25 billion, or about 1.5 per cent of the whole economy.
Cyber-crooks operating at the speed of light easily infiltrate the nation’s horse-and-buggy era frontline defences, such as easily replicated paper forms or Justice of the Peace rubber stamps used to verify original identity documents that can be purchased online for $20.
Organisations such as the Society of Trust and Estate Practitioners (STEP), an international group of lawyers, accountants and other specialists, are lobbying for reforms of the laws affecting people’s assets after they die or are incapacitated, and are attempting to resolve some of the emerging complex legal issues.
But it will take decades to put in place and refine the codes of practice and laws needed to regulate a fast-changing global industry.
The Charles Sturt University and The University of Adelaide estate planning report, sponsored by STEP, found that less than a third of the more than 16 million Australians on Facebook knew the American-based social media company owned all their content after death.
The types of problems this can cause do not always involve money or other valuable assets.
This was highlighted by a NSW family of five children launching an online petition asking Facebook to reinstate their dead father’s account because it contained treasured family pictures and memorabilia.
The account had been taken down because of a request from another branch of the family.
Facebook allows members to set up a legacy contact who can decide what happens to an account upon death. This person has a limited remit to alert friends and family to a memorial service and replace a profile photo.
“There are a number of different options,” a spokesperson says. These include having the account deleted after death or memorialised, which means photographs and posts will stay the same in perpetuity.
“We need to know what the account holder wants. If they don’t, it is up to the family to decide what happens.”
Ten ways to protect your digital assets
1. Prepare an inventory with details of the assets and where to find them. Its location should be made known to an agent, attorney, executor, personal representative, guardian or lawyer. Consider a digital attorney and executor to deal exclusively with your digital assets.
2. List the laptops, tablets, smart phones, storage devices, backup discs and other digital sources the fiduciary must locate. Decide which ones your executor can access and which should be deleted on death. This should be regularly updated.
3. List computer programs and systems your legal personal representative will need to access important information. It should include details on how to access it and what should be done with the information.
4. For added protection, do not use the same password for all accounts and access to assets – access to one account should not guarantee access to all.
5. Specify what items should be destroyed upon death or incapacity.
6. Indicate whether your Facebook page should be changed to an “in memorium” page after death.
7. Check other social media accounts to see if they have an option for treatment of your account upon death.
8. Make your attorney/executor aware they have this role. They may need to act quickly to gain control and ensure assets and your identity are protected.
9. Consider the terms and conditions of your use of the digital assets as well as their country of origin. For example, it’s only you who has a licence to access products purchased from iTunes, which means they cannot be left to another person in your will.
10. Limit the amount of personal information you publish online. Learn how to avoid common scams by visiting Scamwatch. Encrypt computer hard drives to prevent someone accessing digital assets if they get hold of your equipment.