The Overlooked Treasure: Securing Your Digital Assets in Your Will
Wills - Potential Problem #3: Overlooking Digital Assets
In New South Wales (NSW), Australia, the importance of including digital assets in your will is often underestimated. With the rapid growth of digital technology, ensuring that your digital assets are properly managed after your passing is crucial. This aspect of estate planning can prevent legal complications and ensure that your digital legacy is preserved according to your wishes.
Digital Assets and Cryptocurrencies
An increasing number of individuals are earning income through their online presence or securely storing valuable assets on the internet.
Platforms such as YouTube, Facebook, TikTok, Instagram, and Twitch provide numerous opportunities for people to monetize their online activities. In some cases, these digital profiles hold significant value, especially when they generate revenue without requiring constant, direct involvement from their owners.
Each of these platforms has its own set of terms and conditions governing access to their services. Upon a person's passing, these terms may restrict or entirely prevent family members from accessing the deceased's accounts if they do not possess the necessary passwords.
This issue is particularly critical when it comes to cryptocurrencies. We have observed that many of our clients maintain substantial wealth in digital assets and blockchain-based currencies like Bitcoin, Ethereum, Chainlink, Solana, and Dogecoin, among others.
Without proper access to your digital wallets, executors may find it impossible to retrieve these valuable assets, leading to their permanent loss.
To prevent such outcomes, we advise our clients to store their passwords in a secure yet accessible manner, ensuring they can be retrieved when needed.
Real NSW Court Case
The case of Estate of Dalle-Molle v Manos [2013] NSWSC 1789 highlights the challenges and legal issues that can arise when digital assets are overlooked in a will. This case serves as a powerful reminder of the necessity to account for digital assets in estate planning.
What Happened
The problem began when Mr. Dalle-Molle, an avid cryptocurrency investor and social media influencer, passed away without including his digital assets in his will. His significant holdings in Bitcoin, valued at over AUD 500,000, and numerous online accounts were left unmanaged. This oversight led to a legal dispute among his beneficiaries.
Participant Behavior
Mr. Dalle-Molle’s family, unaware of the extent and value of his digital assets, faced numerous challenges in accessing and managing these accounts. His business partner, Mr. Manos, claimed a share of the cryptocurrency, arguing that it was part of their business assets. The lack of clear instructions regarding the digital assets in Mr. Dalle-Molle’s will resulted in a contentious legal battle.
Legal Process
The court had to determine the ownership and distribution of Mr. Dalle-Molle’s digital assets. This involved interpreting the existing will, which made no mention of digital assets, and examining the nature of the business partnership with Mr. Manos. The legal process was complicated by the need to access secure accounts and verify the digital asset holdings, requiring expert testimony on cryptocurrency management.
Financial Implications
The estate’s value included significant digital assets, with the cryptocurrency alone worth over AUD 500,000. The legal fees incurred during the dispute further diminished the estate’s value. Additionally, the time and effort required to resolve the digital asset management issues delayed the distribution of the estate, causing financial strain on the beneficiaries.
Conclusion
Ultimately, the court ruled that the cryptocurrency holdings should be distributed according to Mr. Dalle-Molle’s intended business arrangement with Mr. Manos, while his personal digital assets were to be managed by his designated executor. The case underscored the need for clear instructions regarding digital assets in estate planning.
Lessons Learned
- Include Digital Assets: Ensure your will includes specific instructions for the management and distribution of digital assets.
- Regular Updates: Update your will regularly to reflect changes in your digital asset holdings.
- Legal Advice: Seek legal advice to ensure that your digital assets are properly accounted for in your will.
- Clear Documentation: Keep detailed records of your digital assets, including access information, to facilitate management after your passing.
References and Sources
- Estate of Dalle-Molle v Manos [2013] NSWSC 1789
- NSW Government - Wills and Estates
- Legal Aid NSW - Digital Assets in Estate Planning
Tags and Keywords
Digital assets, estate planning, cryptocurrency, NSW court case, family dispute, legal advice, digital legacy, Estate of Dalle-Molle v Manos, financial impact, asset management
