Digital Assets and Estate Planning

What are digital assets?

Digital assets are a wide range of intangible possessions that cannot be physically held.

Types of digital assets:-

• Cryptocurrencies – Cryptocurrencies (also known as crypto) are digital tokens that eliminate the need for physical money. This type of digital currency allows you to make payments directly to another person through an online system and does not require a bank or financial institution to verify transactions.
• Online Accounts – This includes email accounts, social media profiles, cloud storage and any subscription services.
• Digital media – This includes all digital photos, videos and anything contained in music libraries.
• Financial accounts – This includes online banking accounts or utility accounts where you do not receive paper statements, investment accounts and digital wallets such as PayPal.

Why is it important to include digital assets in your estate planning?

Cryptocurrencies can have a significant financial value and if that is the case, it is vital that they are not missed or lost throughout the estate administration process.

Digital media (such as photos and videos) and social media accounts can often have a large personal significance to your loved ones and as we find ourselves in a time where hard copies of images are becoming less popular, digital photos and videos have great sentimental value.

It can be extremely difficult to access digital assets and accounts due to encryption, access requirements and varying terms of service throughout different platforms. On the other hand, digital assets are also susceptible to cyber threats, so it is vital that it is made easier for your executors to access your digital assets to limit security concerns. The assets may also be held by non-UK companies meaning that the laws governing them may not be that of the UK.

What would we advise?

We would advise that you create a comprehensive list of all of your digital assets including account information, asset valuation and access instructions (where account conditions permit this). The requirements will vary depending on with which company you hold the asset but generally this will include your account number, the value of the asset at the time you made the list and where your Executors can find your digital assets.

We do not recommend that you include passwords for any of your accounts as this increases the risk of a security threat. Executors accessing accounts using your details after your death may also be committing an offence under the Computer Misuse Act 1990. Your list will need to be updated from time-to-time as your assets increase or decrease. We would advise that you retain your list of assets in a secure location such as a safe and advise your Executors where it is stored.

Providing your Executors with a list of your digital assets will make it easier for them to be able to locate your assets, collect them in and to distribute in accordance with your Will.

If you need any more information on this topic, please contact our Private Client Team.