Digital Assets and Estate Planning

What are Digital Assets?

Digital Assets are, broadly speaking, a category of assets which are not ‘tangible’ and can include, for example, media such as photos or videos stored electronically, social media accounts, intellectual property and also crypto currencies – which is becoming more and more relevant.

Digital Assets do not, however, encompass items such as the phones or computers on which the assets may be stored.

As technology advances, most estates will comprise Digital Assets in some form or another, from a Facebook account, email account, photos stored in the ‘cloud’, to assets such as Bitcoin or NFTs.

Digital Assets may be of financial or sentimental value and it is important to consider what Digital Assets you may own when making a will, administering an estate, or assisting someone who may have lost capacity.

What do you need to consider when dealing with Digital Assets?

There are three key issues to consider when dealing with Digital Assets; locating, accessing and valuing Digital Assets.

As Digital Assets are not tangible, they may be difficult to locate or to ascertain exactly what is held.

It is, therefore, recommended that you may wish to keep a schedule / inventory of any Digital Assets you own, and where they can be found, to assist when making a will, in the event that someone needs to step in and help you manage your affairs, or when you pass away.

As Digital Assets are often personal to the individual, they may be protected, for example, by passwords.

It is not, however, necessarily lawful to simply provide your passwords to your representatives, whether that be your executor or attorney, so that they can access the assets when required.

Different providers have different requirements to allow access and if you have concerns about access being gained to the assets once you have passed away, or if you no longer retain capacity, you may wish to make contact with the provider to find out their requirements, and possibly even nominate a representative who you would wish to permit to access your assets when you are no longer able to do so.

Some providers, such as Facebook, have a service whereby you can choose to appoint what is known as a legacy contact to manage your account once you have passed away.

It is also possible to, for example, specify the powers your attorneys should have in respect of such assets, when preparing your Lasting Powers of Attorney, and this is something you may wish to consider with your legal adviser.

Once access has been obtained, certain Digital Assets, for example personal photos, may have no financial value at all, but have extreme sentimental value, and some, such as Bitcoin may be relatively easy to value.

Certain Digital Assets will, however, be more difficult to value, and you may wish to seek professional assistance in this regard.

Frequently Asked Questions

What are considered digital assets?

Digital assets include any online or electronically stored items you own, such as social media accounts, emails, photos, videos, cryptocurrencies, and intellectual property.

Are digital assets included in my estate automatically?

Yes, but they are often overlooked. Without proper planning, it may be difficult for executors to locate or access them.

Can I share my passwords with my executor or attorney?

Not always. Sharing passwords may breach certain providers’ terms and conditions, so it’s important to seek legal advice and explore approved access options.

How can I ensure my digital assets are found after I pass away?

You should keep an up-to-date inventory or schedule of your digital assets, including where they are held and any relevant access instructions.

What is a ‘legacy contact’?

A legacy contact is a person you appoint (e.g. on platforms like Facebook) to manage your account after your death, in line with the platform’s policies.

Examples

Example A

The lost cryptocurrency wallet

John held a significant amount of Bitcoin but never shared details of his wallet or private keys. After his passing, his family knew the asset existed but couldn’t access it, resulting in a permanent loss of its value.

Example B

The properly planned estate

Linda kept a secure, up-to-date inventory of her digital assets and documented access instructions in line with provider rules. She also included clear provisions in her Will and appointed a trusted person to manage them, ensuring a smooth transition.