What is a digital asset?

A digital asset is anything you may own, or have rights to, that exist either online or on hard storage devices. Some examples of your online assets include email, social networking, iTunes, cloud storage and financial accounts. Hard storage devices include assets such as computers, laptops, USB, smart phones and any other external storage drives which are locked by way of encryption.

Why is important to consider our digital assets in estate planning?

 Whilst we are creating personal digital assets at an unprecedented rate, the laws governing them have not developed simultaneously. It remains unclear where the notion of digital assets fits among other traditional concepts of property. Therefore in order to protect these assets, it is important to make separate provision for dealing with them in your estate plan.

It is important to deal with these assets for various reasons.  This includes the prevention of identity theft, to have your history and memories recorded and your wishes expressed, to continue the management of any online business, to assist your executors in the estate administration process and also for preventing any litigation which may be required in being able to gain access to such assets.

Furthermore, whilst the value of a digital asset may vary, the particular type of value of the asset may be significant for a loved one or beneficiary. For example, the asset may have sentimental value such as digital photos, or it may have significant monetary value such as a professional blog or writing.

How do I include digital assets in my Estate Plan?

 The first step is to create a digital inventory of all your assets. This inventory will need to include the names of all your assets and where they are stored, as well as all the usernames, passwords and secret questions which will allow a nominated person to be able easily access them upon your incapacitation or death.

It is then important to think about what you’d like to happen to these assets upon your incapacitation or death. For example, would you like to have your Facebook account closed down or memorialised? Is there someone in particular you would like to have access to your iTunes account?

Once you have made the inventory and considered what you would like done with your assets, it is then important to make your wishes legally binding by formalising them in a Will and Enduring Power of Attorney.

Incapacity

The most important part of planning for incapacity is to execute an Enduring Power of Attorney.  This document will allow you to appoint someone that you trust to deal with your digital assets effectively and properly in the event you are incapacitated and can no longer control the accounts yourself.

Death

 Your Will is the document which addresses how your assets will be dealt with upon your death. Therefore it is important that your Will make provision for and include a clause that will give power to your executor to handle and manage your digital assets in accordance with your wishes and the terms of your Will.

Your executor, being the person you have nominated to administer your estate, should also have access to your inventory of your digital assets. This allows them to know what assets exist and where to locate them. The inventory should remain separate from the Will and should be updated as required.

The concept of ‘digital assets’ is no longer an idea of the future but rather it is very real and present right here and now. Therefore, it is prudent to seek advice from a solicitor in relation to your digital assets and your estate planning needs. A solicitor is best equipped to provide you with appropriate advice on how to best to structure your affairs in order to ensure your digital assets are dealt with effectively in your estate plan. For advice on Wills and Estate matters contact Jason Coluccio or the team at Welden & Coluccio Lawyers.

What is difference between making a Will and an Estate Plan?

We have provided a case study to help explain the difference.

Firstly, a Little Background

A client was concerned that at their death, their assets could be sold off by the surviving spouse during their remaining lifetime.

A solicitor was instructed and a comprehensive testamentary trust was developed at some expense.   Accordingly, the assets would be subject to the decisions of the appointed trustees. An important requirement was the trustees had to act in unison.  In other words all decisions relating to the trust must be unanimous.

The client was happy as their assets were now protected.

Or so they thought?

What Was the Problem?

Upon closer analysis, the complicated and expensive testamentary trust afforded absolutely no protection for the client.  Not a scrap.

Why you ask?

Well, the drafter of this Will did not undertake an overall plan of the instructing client’s estate.

It turns out that had the instructing client died first, all of the assets that were the subject of the desired protection would not fall into the deceased’s estate.

Why you ask?

Some of the assets were held jointly.   As such, these would be retained by the surviving spouse (right of survivorship). Other assets were held in existing trusts and the surviving spouse was the sole appointee and trustee.

Other assets were held in companies, whereby upon detailed review, the instructing client was not a director or shareholder, and as such, could not influence any control over those assets via the Will.

Could It have Been Fixed?

The simple answer is yes.

However, the solicitor needed to dedicate the time to examine all the assets that the instructing client had, how the assets were held and the structures in which the assets were held in.

Welden & Coluccio Lawyers provide you with an in-depth analysis of your assets and advise you as to the options you have when it comes to protecting your assets after you die, irrespective of which spouse dies first.

What is The Lesson?

There is a huge difference between making a Will and having an Estate Plan. Don’t leave the control of your estate and your assets in a Will unless you have had it prepared by a dedicated Estate Specialist.

Welden & Coluccio Lawyers are The Estate Specialists. It’s what we do.

I drafted my own Will using a Will Kit a couple of years ago, but my circumstances have since changed and I want a few things altered.  Is it okay if I just handwrite the changes in the margin and then sign and then date those changes?

 Is it okay?  The simple answer to this question is no, absolutely not; but the complex answer to why this is the case is not so straightforward.  Firstly, a Will, or any changes made to a Will must be made in the presence of 2 witnesses.  In either situation, each party must sign.  If not, then according to the Wills Act when the document is lodged with an application for probate, the document may be referred to a Judge to determine if the handwritten alteration was actually part of the “Will” and that can become very expensive.  According to the Wills Act, no alteration in a Will has any effect unless executed as a Will.

Consider the true case of Mr Barnes (name altered).  He made a Will in handwriting using a Will Kit form on 8 December 2004.  He appointed his wife as executor and left his whole estate to her. He provided for particular items to pass to certain people and then, if his wife died before him, his estate was to be equally divided between his two children, one of who was named the executor.   One week later Mr Barnes’ wife was admitted to hospital with a heart attack and died. The following day Mr Barnes’ Will was placed with a bank for safe keeping and it was never removed until his death.  It can be assumed therefore, that from the time the Will was lodged with the bank it was not altered.  However, following the death of Mr Barnes a couple of years later, it was discovered on the original Will, the handwritten addition of a few lines in a different pen of various comments.  This included words to the effect that the directions in his Will were to take effect only if his wife died before him.

This alteration was not signed or witnessed.  In this situation the document was referred to a Judge who concluded that the handwritten alteration was made after Mr Barnes’ wife had a heart attack but before she died, one day before the will was lodged at the bank. It determined that the final few lines of handwriting were intended by Mr Barnes to constitute his Will.  What this meant was that the Court decided these words meant that Mr Barnes wanted his Will only to operate if his wife pre-deceased him. As Mr Barnes’ wife had died before him, the addition of these words meant that the Will was virtually useless.

Accordingly, the Court determined that Mr Barnes died intestate (without a Will).  Fortunately, in this case such a determination had little impact upon the final distribution of his estate.  However, it serves to highlight the risks associated with making handwritten alterations on any Will (Will Kit or otherwise), with any changes being made in accordance with the requirements of the Wills Act.

Even the smallest blemish, mark, alteration (intended or unintended) on an original Will can cause significant difficulties, expense and delays in the administration of your deceased estate.

It is prudent to seek advice from a solicitor experienced in drafting Wills before making any changes to a Will.  A solicitor is best equipped to provide you with appropriate advice related to the changes being made and the long term implications of such changes.  Furthermore, any changes will be made with the ‘peace of mind’ that they are completed in a manner congruent with the Wills Act using documents such as a Codicil.  For advice on Wills and Estate matters contact Greg Welden, Jason Coluccio or the team at Welden & Coluccio Lawyers.

If I had a dollar for every time someone said this to me I could retire right now.  You see everyone thinks that their circumstances are straightforward and it follows then that they believe that their Estate needs will be easily satisfied with either a “cheap Will”, a blank template where you enter names and addresses; or, even worse, a DIY Will Kit.

Truth is, few Wills actually are straightforward, and a generic Will rarely ‘cuts the mustard’ for most people.  In fact, there are a tonne of situations that can make drafting a Will a complicated process best undertaken by an expert.  Consider the following scenarios and ask yourself if any of these situations apply to you:

–          Have you ever been divorced or separated?

–          Following a separation or divorce have you remarried or have you commenced co-habiting with another person?

–          Do you have children to two or more different people?

–          Are you employed by the government and have superannuation with Super SA?

–          Do you own real estate, wholly or with another person(s)?

–          Have you ever been declared bankrupt?

–          Have your children ever been declared bankrupt?

–          Are you concerned that assets will be lost to children following a divorce?

–          Following your divorce are you concerned about what might happen if your ex-spouse remarries?

–          Do you own a business, wholly or with another person(s)?

–          Do you own shares?

–          Are you a professional and thus open to the risk of litigation (eg any professional, especially Lawyers, Doctors, Accountants and          Financial Advisers)?

–          Do you have children who are minors?

–          Are you uncertain if you have a death benefit associated with your superannuation fund?

–          Do you know who your beneficiary nominated in your superannuation is?

Each of the situations described above requires a high degree of personalisation when it comes to the drafting of a Will.  This is not possible to do with a generic Will and definitely not possible with a DIY Will kit.  Furthermore, some of these situations will necessitate drafting of a Testamentary Trust.  This specific type of Will is best undertaken by an Estate Specialist, with many in the legal profession unskilled in this area.

There are many risks associated with generic and DIY Wills.  In a nutshell they often prove grossly inadequate when it comes to meeting the needs of the ‘average person’, with the potential for unintended errors that may cost your beneficiaries large sums in legal costs.  At Welden & Coluccio Lawyers, we have the know-how to ensure that every aspect of your circumstances is taken into consideration for the protection of your beneficiaries and your wishes.