Protecting Your Digital Assets


February 23 2015


Ten years ago the idea of protecting your digital assets after your death, or if you lost mental capacity, would have been regarded as absurd. Many of us now regard this as critical. However, there’s very little guidance available on how best to ensure these assets are identified and dealt with in these situations. Protection of digital assets does not fit neatly into traditional asset planning concepts or inheritance plans.

First let’s define the key assets in this digital arena.

  1. ‘Digital assets’ are emails, texts, images, data, social networking, health care records, usernames, passwords, insurance records, loyalty points, etc
  2. ‘Digital devices’ include laptops, mobile phones, desktops, tablets, smartphones, servers and so on, and
  3. ‘Digital accounts’ include email accounts for social networks, social media, file sharing, domain registration, web hosting, etc.

A digital estate

‘Digital estate’ is sometimes used as the umbrella term to encompass digital assets, digital devices and other digital accounts.¹

Important reasons to protect or make provision for your digital estate are that it may have financial or sentimental value; there could be security or financial threats; and if incorrectly managed, liability may result.

One of the key decisions is who should manage and have control over your digital estate when you die or if you lose mental capacity. Another important decision you’ll have to make is who will receive or benefit from your digital estate. For example, can you transfer or gift your airpoints and, if so, who should you give them to?

It would be a normal presumption that your surviving spouse or children should take over control of your digital assets, as they would the rest of your estate. However, if they have limited technological skills, it may be that there are other people who are best suited to take over this particular role.

Decisions may also be required as to which digital accounts are to be closed, digital devices cleared of content and whether printouts of certain digital information should be provided to specified people.

Once appointed the attorney or estate executor may need the skills, or at least may need to employ others with the necessary skills, to:

  • Manage financial arrangements that are conducted online
  • Pay debts or outgoings relating to digital accounts
  • Decide the form in which digital assets should be given to the beneficiaries
  • Decide who owns your digital accounts
  • Specify who should have access to your digital accounts, and
  • Ascertain whether digital accounts should be closed, transferred or sold.

In practical terms, it may be best to include in Enduring Power of Attorney documents the ability for the care and welfare attorney to access medical or dental records and for the property attorney to access digital accounts. Similarly executors named in Wills may need to access digital accounts, change passwords and manage financial affairs in the digital arena.

A letter of wishes may also be desirable in some cases. It can be helpful for trustees, or for a property attorney, to be guided by a non-binding statement of your wishes regarding your digital estate. It would be wise also for an inventory of your digital estate to be provided to the executor or attorney and to be held in a secure place.

Dealing with digital assets is an area that will only increase in importance over coming years. It’s important therefore for us all to start thinking about these issues sooner rather than later. While there’s no legislation in New Zealand dealing with protecting digital assets when you die, some states in America do have specific legislation in this area.²

¹ See for example “Digital life after death” by K. Martin and P. Womall, STEP Journal, Volume 22 issue 10.
² Delaware has adopted a Digital Assets and Digital Accounts Act.


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