Background
The world we live in today, has seen an increase in the use of digital records and assets. Most people now possess items stored on their electronic devices or on third-party servers. Upon death, access to digital assets might be necessary for the effective administration of the deceased person’s estate. And the question of who should access such assets becomes inevitable.
Despite the advent of technology and the increased reliance on it, the draftsmen of the Succession Act (NSW) 2006, have not thought of including property in digital form, as part of the definition of property in s 3 of the Succession Act.
Within this background, the NSW Law Reform Commission (“The Commission”) has been recently asked by the Attorney-General to report on laws affecting access to digital assets and records of a person after death.[1] In particular, the Commission has been asked to consider the question of whether NSW should enact laws regarding who may access a person’s digital assets after they die and in what circumstances.[2] In its report which has been tabled in Parliament on 5 March 2020, the Commission has expressly stated that the recommended laws aim to balance the wishes of the deceased person and the needs of the estate administrators.[3]
It is to be noted that the terms “digital records” and “digital assets” are not to be used interchangeably. Indeed, digital assets seem to be treated as a sub-category of digital records. The Commission has emphasised that digital assets are digital material in which the person has proprietary rights or interests such cryptocurrencies and certain digital material in which the person has intellectual property rights such as digital artwork or photographs. In contrast, digital records include digital assets but also items that are not strictly the property of the user such as social media accounts.[4]
The gist of the Commission’s Recommendations
The need for new legislation
The Commission seems to have judged the current laws in NSW as insufficient to address the question of accessing a person’s digital assets after death. This can be seen from the Commission’s recommendation that NSW should enact new laws enabling an authorised person to access a deceased person’s digital records in certain circumstances.[5]
Jurisdictional issues – To whom the laws should apply
The Commission recommended that the new law should apply to deceased persons who were domiciled in NSW at the time of their death.[6] However, the new laws will still apply to custodians (being persons or services that had at the time of death of a person, a service agreement with the person to maintain certain digital assets of such person) regardless of their locations.[7]
Meaning of digital records
This potentially includes emails, social media accounts and electronic bank accounts. However, the Commission has emphasised that the prospective laws do not apply to money in bank accounts, a copyright in a literary work or liability.[8]
Authorised persons (examples of who can access a person’s digital assets after death)
A person appointed under a will
A person appointed under a will, will have access to particular digital assets of the deceased person.[9] Whether there is a need for an application to the court to grant probate before a person can manage the assets of the deceased person, will depend on the type of will. If it is a formal will, the person nominated by the deceased person can manage the digital assets regardless of whether a grant of probate has been obtained.[10] However, in the case of an informal will, a person will only be able to manage a deceased person’s digital assets if there has been grant of probate.[11]
Person nominated through an online tool
Among the online tools are Facebook’s “Legacy Contract” and Google’s “Inactive Account Manager”.[12] If a deceased person does not leave a will, the person responsible for managing the deceased person’s digital assets would be the person designated by the deceased person through an online tool provided by a custodian.[13] For instance, if Facebook permits users to appoint a person to manage their Facebook account upon death, then the person appointed by the deceased person will be given access to the Facebook account.
An executor under a will
It is noteworthy that an executor under a will does not automatically have access to a deceased person’s digital records by reason of their office of an executor. The Commission appears to suggest that an executor will only have the responsibility of handling digital assets if the deceased person does not nominate a person under a will or an online tool.[14]
An administrator of the estate
There can be recourse to an administrator of the estate to manage digital assets, only as a last resort. This essentially means that an administrator will only be able to have access to mange digital records, only when there is no person appointed under a will or though an online and there is no executor willing or able to act.[15]
A person who has access information for digital records
If the court has not ordered probate or administration for any reason, then a person to whom the deceased person has communicated access details for digital records, will be responsible for the digital assets.[16] A person will not be permitted to manage digital assets if such person holds access information by reason or an employment or other contractual relationship involving remuneration, unless otherwise indicated by the deceased person.[17] This means that if a deceased person gave another person access information about digital assets through an employment or other contractual relationship, and gave permission to manage such assets upon death, then the person is authorised to manage the assets.
Whether more than one person can be nominated to access digital records
The Commission recommended that any prospective legislation should provide for the possibility to appoint more than one authorised person to manage and access digital records.[18]
When is a person legally eligible to manage the digital assets of a deceased person
The Commission suggests that before actually managing any electronic assets, an authorised person should first apply to the Supreme Court of NSW for an order that they are authorised person entitled to access certain digital assets of the deceased person.[19]
How can authorised persons deal with digital assets?
According to the Commission, dealing with digital assets entails transferring the digital records to the authorised person but does not include editing the content of digital records.[20] When dealing with digital assets, an authorised person must take into account fiduciary duties, any other applicable laws, terms of the will (if any) and the terms of an online tool (if any).[21]
It is to be noted that if an authorised person entitled to access certain digital records also has authority over the deceased person’s tangible personal property containing a digital record, they are entitled wo deal with the tangible property and the digital records stored on it.[22]
This means that an authorised person who is entitled to access particular digital records does not necessarily have authority over the deceased person’s tangible personal property where the digital record is stored. It all ultimately depends on the wishes of the deceased persons as expressed under a will or an online tool.
The Commission has also recommended that where the authorised person entitled to access digital records is not also acting as an executor or administrator of the estate, the authorised person must assist the executor or administrator by providing them with relevant information.[23]
Duty of confidentiality of an authorised person
Authorised persons are bound by a duty of confidentiality. Indeed, it is an offence for an authorised person to disclosed information about the deceased person or any another person, obtained in accessing the digital records unless the disclosure is:
- In accordance with the terms of will or online tool
- For the purpose of administering the deceased person’s estate
- Necessary for legal proceedings
- Authorised by law
- Authorised by court or tribunal in the interests if justice, or
- Disclosed to authorities as necessary to prevent serious risk to life, health or safety or to report a suspected serious indictable offence[24]
Access requests
Obtaining access to an any electronic documents stored on the device of a deceased person should be straightforward. However, the procedure for managing digital records such as any social media accounts, becomes complicated as there are third party involved, namely the custodians.
When custodians are involved, an authorised person may request access to the deceased person’s records stored or maintained by a custodian by contacting the custodian and providing proof of authority.[25]
The proof of authority usually required by a custodian will usually differ from one custodian to another. However, the Commission has suggested a list of proof of authority which includes proof of death, formal will, a statutory declaration establishing that the will is last valid will in case the formal will has not been proved, grant of probate and proof of the authorised person’s identity. If for any reason an authorised person is unable to prove authority to access digital records through the provision of any of the abovementioned documentation, then authority can be proved by providing an order from the Supreme Court of NSW stating that they are the authorised person.[26]
When a custodian should provide access
A custodian who receives a request to obtain access from an authorised person, must provide access within 30 days of receipt of request unless access is not technically feasible.[27]
Protecting custodians from liability
The Commission suggested that any prospective legislation should protect custodians from liability for acts or omissions done in good faith to comply with legislation.[28] One potential scenario where custodians are protected from liability is when a custodian refuses to grant access to digital records in the absence of any proof of authority provided by an authorised person.
Protecting the authorised person from liability
A person who acts as an authorised person in good faith and without knowing that another person is an authorised person, is exempt from liability.[29]
Conflict of laws
In case of a conflict between a service agreement or custodian policy on the one hand, and the prospective legislation on the other, the legislation shall prevail to the extent of inconsistency.[30]
NSW as the proper forum for disputes
For the purpose of determining the proper court to deal with any disputes related to digital assets, the courts of NSW have jurisdiction, and for this purpose, any service agreement to the contrary shall be disregarded.[31]
Few ways to manage digital records
Another way to manage digital assets is to rely on a digital legacy service.[32] These are websites on which users may store passwords and allow nominated individuals to access digital records and carry out the wishes of the deceased person.[33] However, the disadvantage of such websites is their tendency to develop and disappear quickly and thus might not be in existence when the person dies.[34]
Another option for testators would be to use a personal digital archive.[35] Facebook and Twitter users may download a record of their personal data.[36] Users can then store data on external storage devices.[37]
Conclusion
It remains to be seen the extent to which the law will be effective in practice. This is especially so because third parties such as custodians are involved. For example, while the legislation is intended to prevail over any custodian policy, the prospect that an account may be deactivated or deleted after a period of inactivity[38], does not seem to be adequately addressed.
Another dilemma is that some custodians such as Microsoft may not accept to provide access to family members or other third parties upon death.[39] The Commission does not provide for mechanisms to enforce the legislation upon such custodians.
Tips for testators to keep in mind until the legislation is passed
Testators must be aware that not all digital records are considered as personal property.[40] Whether a digital record satisfies the legal definition of property, will depend on the applicable service agreement.[41] The service agreement may create a transferable asset or merely a licence that expires on the person’s death.[42]
Until such legislation is passed, it is advisable that wills be drafted in a concise manner and that the wishes of the testator be made explicit. This is because, as the Commission suggested, a general power to deal with a deceased person’s personal property under a will may not be enough to authorise access to the deceased person’s data held in a computer.[43] This is because being authorised to deal with a computer is not the same as being authorised to access data stored on it.[44]
Further, it is recommended that testators provide lawyers (if they wish so) with a digital register listing their online accounts along with passwords and instructions about using and managing those accounts. Testators should also consider advising lawyers of any change of passwords and updating their digital register accordingly.
Generally, if a digital record is part of the deceased person’s property, the legal personal representative (an executor or administrator) has the authority to deal with it.[45] However, if the rights to a digital record terminate upon death, such digital record will not be considered as part of the deceased person’s property.[46] And thus, a legal personal representative might not be authorised to deal with it.[47]
Testators may be interested in including in their wills a clause in the following terms: “All digital rights, accounts, assets, and device content which is not otherwise personal property or the subject of a specific bequest, shall form part of the residue of my estate and my executor is empowered to deal with these assets”.[48]
Whether such clause is workable in practice is a different question. Indeed, our view is that only digital assets which are strictly the property of the testator will be part of the estate. Therefore, a clause permitting an executor to deal with digital records which are not part of the personal property of the deceased, may not be effective to grant an executor access to such records.
Another issue to be considered by testators is the absence of any conflicting instructions. This means that testators should ensure that, in case instructions were given through a will and an online tool, such instructions are identical and devoid of any inconsistency.
Also, in case a testator expresses testamentary intentions through a will and an online tool, then testators should consider altering the will through a codicil or by remaking a will.[49] The Commission has emphasised that any change of mind regarding who should access digital records, should occur through a will and not an online tool.[50]
It is also important to note that for some digital records, there is no custodian to contact.[51] For example, cryptocurrencies such as bitcoin operate without a custodian.[52] Therefore, it is important for testators to share access information.[53]
Testators should also be aware that while access to certain digital records is feasible, the transfer of a digital record to a beneficiary as a gift is not always permissible. For instance, Facebook does not allow accounts to be transferred to another person.[54]
Testators may not only be concerned with access issues regarding digital records, as privacy concerns may come into play. For this reason, it is commendable that testators be asked if they want their devices to be cleared of content before they are transferred to beneficiaries.
Ensuring access to digital records is also important to facilitate the estate management. Indeed, assessing assets and liabilities which is part of a probate application, might necessitate access to a digital record. Also, there might be liabilities relating to online accounts. Therefore, it is good practice to advise testators to download content from their online accounts so their executor or any other nominated person can find it.[55]
In relation to digital records that are maintained by Commonwealth government services such as myGov, My Aged Care and My Health Record, it is recommended to check with the relevant entities whether access details can be shared by the testator with any other person for estate management purposes. This is because some digital records maintained by government entities may contain taxation information of the testator.[56]
By Samar Ashour
Paralegal, The IP House Lawyers
[1] https://www.lawreform.justice.nsw.gov.au/Pages/lrc/lrc_current_projects/Digital%20assets/Project-update.aspx
[2] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[3] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[4] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[5] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[6] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[7] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[8] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[9] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[10] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[11] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[12] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[13] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[14] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[15] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[16] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[17] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[18] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[19] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[20] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[21] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[22] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[23] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[24] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[25] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[26] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[27] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[28] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[29] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[30] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[31] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[32] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[33] C Bellamy and others, “Life Beyond the Timeline: Creating and Curating a Digital Legacy” (Paper presented at Nexus, Confluence, and Difference: Community Archives Meets Community Informatics, CIRN Conference, Prato, 28–30 October 2013) 9.
[34] D M Lenz, “Is the Cloud Finally Lifting? Planning for Digital Assets” (2017) ALI CLE Estate Planning Course Materials Journal 35, 38. See also E Harbinja, Preliminary Submission PDI12 [23].
[35] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[36] Facebook, “Accessing and Downloading Your Information” <www.facebook.com/help/1701730696756992> (retrieved 18 December 2019); Twitter Inc, “How to Download Your Twitter Archive” <help.twitter.com/en/managing-your-account/how-todownload-your-twitter-archive> (retrieved 18 December 2019).
[37] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[38] See, eg, Microsoft, “Inactive Account” (15 December 2019) <answers.microsoft.com/enus/outlook_com/forum/oemail-orestoremail/inactive-account/7e2ebe2d-c554-4934-995f6f1185f289fc>.
[39] E van der Nagel and others, Death and the Internet: Consumer Issues for Planning and Managing Digital Legacies (Australian Communications Consumer Action Network, 2nd ed, 2017) 8.
[40] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[41] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[42] H Conway and S Grattan, “The ‘New’ New Property: Dealing with Digital Assets on Death” in H Conway and R Hickey (ed), Modern Studies in Property Law (Hart, 2017) 102.
[43] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[44] See, eg, J Clough, Principles of Cybercrime (Cambridge University Press, 2012) 72.
[45] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[46] L McKinnon, “Planning for the Succession of Digital Assets” (2011) 27 Computer Law and Security Review 362, 363.
[47] F K Hoops, F H Hoops and D S Hoops, Family Estate Planning Guide (Thomson Reuters, 4th ed, 2019) 9.
[48] See M-A de Mestre and H Morrison, “Technology and Probate” (2016) 43 Australian Bar Review 8, 9.
[49] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[50] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[51] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[52] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[53] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf
[54] D N Dissanayake, “The Challenges of Digital Legacy Management on the Value of Digital Objects to Older Australians” (Master of Science (Computer Science) Thesis, Edith Cowan University, 2019) 114.
[55] K Birtwistle, Access to Digital Records upon Death or Incapacity: Survey Results, Research Report 15 (NSW Law Reform Commission, 2019) [4.8]–[4.9] Table 4.3. 40
[56] https://www.lawreform.justice.nsw.gov.au/Documents/Publications/Reports/Report%20147.pdf