CAPITAL letters - Issue 32
What does Judy Garland, a mysterious envelope and Tinder have to do with digital estate planning?
| Happy New Year everyone and welcome to the first Capital Letters of 2022 (and hopefully not the last). In 2021 we strengthened our private wealth presence in London and Asia, with Michael Rutili joining in London, Wei Kang in Hong Kong and Suzanne Johnston in Singapore, underlining our commitment to private clients internationally. As such, it is my pleasure to introduce you to Suzanne who has kindly drafted a special edition, on the very topical subject of digital estate planning. The next voice you will hear is from Suzanne, so over to her….. |
Project Rainbow
A few years' ago, my father sent me a mysterious envelope in the post. Scrawled across the envelope were the words "Project Rainbow". My dad is prone to using "project" to describe a multitude of things – a legacy, of his past working life. Inside the aptly titled "Project Rainbow" was a list of passwords to various email/online accounts and bank account numbers.
The beginnings of a digital estate plan
Project Rainbow set out to do something very prudent; allow me access to my dad's digital footprint after his death. Unfortunately, the plan was flawed. Not least because I have a panic attack if I misplace the envelope. More pressingly because passwords change regularly for security reasons.
At risk of sounding like Carrie Bradshaw, I couldn’t help but wonder, how can we implement an effective and robust "Project Rainbow"?
But first, what is a digital asset?
Almost anything you retain a digital record of is a digital asset. Email accounts, online banking accounts, ecommerce accounts (Amazon, eBay, Lazada), online photos, personal information stored on your laptop or phone, social media accounts (Facebook, Instagram, LinkedIn) and even your dating account (I doubt my father has one of those). External hard drives, tablets, smartphones and intellectual property can all constitute digital assets.
It may be simpler to ask, what isn’t a digital asset?
It surprised me to learn that while the account access platform to cryptocurrency is a digital asset, the asset itself (eg Bitcoin) is not a digital asset. Instead, it forms part of your estate and is subject to a different set of laws. Similarly, electronic bank account statements are a digital asset but the liquid funds in the bank account are not. Mind, blown.
Designing your own "Project Rainbow" (the making of a digital estate plan)
A word of caution, not all jurisdictions recognise the legality of a digital estate plan or a digital executor. Don't let this stop you having a digital estate plan and naming your digital executor in your will. It's important your loved ones know that you have digital assets and your intentions for them.
A: Hire Stephenson Harwood (or another awesome law firm)
We can help you identify your digital assets, draft your digital estate plan, and decode the law in relation to digital assets.
B: Select a digital executor (and a substitute)
Choose wisely (like my dad). A digital executor (much like any executor named under your will) should be committed to following your wishes. It is a bonus if they are tech-savvy (sorry, dad). Your choice of digital executor may be driven by the type of digital property you own, is it personal or financial, or both?
C: What do you want to happen to your digital assets?
You may want some of your digital assets to be archived and saved (eg photographs) or erased (eg that dating account). It's also possible to transfer a digital asset to a friend, family member, or business partner (eg revenue generating assets, credits or points with cash values). It's critical that you make your digital estate plan crystal clear on your intentions for each digital asset. Your wishes may contradict some service providers terms of business. Keep this in mind but set out your wishes regardless.
Typically, online service providers only permit the account owner access to the online services. This is all well and good to prevent unauthorised access but is not user friendly in the afterlife! Online service providers may deny family members login information. Worse still, they may delete or deactivate the accounts so that your family lose the ability to access your digital property. If you have a digital estate plan, then typically your family don't need to engage the service provider to gain access to your accounts.
D: Let your digital executor know how to access each digital asset
Is the asset password protected? Does it require a two-step verification? It is painstaking but (like my dad), you can list each password next to the relevant asset. Alternatively, you can use an online password manager to store your passwords. That way, your digital executor only needs one password to access the password manager program.
Maybe my dad was onto something after all…
You have written your digital estate plan (project rainbow) but how do you keep the "pot of gold" at the end of it secure?
You can ask your lawyer to retain your digital estate plan alongside your will. You shouldn’t include your digital estate plan in your will. Unless you are royalty, your will is made public during probate – you don't want the world to know your passwords!
Alternatively, you can entrust the plan to an online storage service or vault. Failing that, you can keep it in an "old school" filing cabinet or safe (or drawer in my case).
Above all, let your digital executor know you have a digital estate plan and where it is kept!
