The concept of a person’s estate now extends to digital assets, which includes Bitcoins or other cryptocurrency stored in a encrypted digital wallet. The process of disposing of such assets after a death is something not many digital natives has considered.
David Toole, legal director of estate and business succession at BAL Lawyers, says that once digital assets are identified, they are treated in much the same way as other assets. People need to plan how they can help their family or executor deal with them.
But he warns there are some complications. Because cryptocurrencies are not backed by any government regulator, there is no chance that anyone will step in to help you resolve the situation if a problem occurs.
“If an executor or beneficiary does not know the encryption key, there is almost no way they can access the deceased’s assets,” Toole says
“On the other hand, providing this information during your lifetime may compromise the security of the cryptocurrency. You have to consider whether it is appropriate to leave a list of user names, passwords and keys to online assets, so they can be dealt with.”
Toole says the question of how to dispose of digital assets goes way beyond cryptocurrencies.
“Take a moment to consider what digital assets you own. They might include SMS messages on your phone or a messaging service; content of your smartphone; emails, social networking content, streaming content services and digital downloads; funds in PayPal and airline frequent flyer points; and all the devices that support these assets.
“Who should have access to your email, social media accounts and so on? Do you know what happens to documents and photos in cloud storage?”
A complicating factor is that a “digital estate” may include a mix of third party intellectual property, the deceased’s intellectual property and contractual rights in the form of licences and terms of use.
“It is a mistaken belief that the deceased ‘owns’ all their digital content,” Toole says.
A Facebook user, for example, has no ownership of the content they upload onto their page. The Facebook statement of rights and responsibilities states: “You grant us (Facebook) a non-exclusive, transferable, sub-licensable, royalty-free, worldwide licence to use an IP content that you post on or in connection with Facebook.”
Google and Apple have similar licensing agreements.
Toole says everyone should have an estate plan and that plan should cover traditional assets and digital assets.
