Digital Inheritance – What happens to your digital assets when you pass away?

The internet is becoming a growing part of everyday life and it is more important than ever to consider what will happen to your digital assets when you die. The Law Society have found that a massive 93% of people in the UK that have a Will, do not have any provision for their digital assets on death. There can be major consequences if provisions are not in place, which could see your digital assets ending up in the wrong hands, or even being lost forever.

Topics to be answered in this article

What are digital assets?

‘Digital assets’ describe any possessions which exist in a digital format. These can be income producing, or merely sentimental. For example: –

 

  • Email accounts
  • Cryptocurrency – bitcoin
  • Social media – facebook, twitter, instagram 
  • Music libraries 
  • Gambling accounts 
  • Business products – photos, art, written works 
  • Loyalty schemes – tesco clubcard points 
  • Sentimental photographs or videos 

Protecting your digital assets during your life

A Lasting Power of Attorney for property and finances can ensure that your digital assets are protected during your lifetime. A specialist clause would need to be inserted into your Lasting Power of Attorney in order to allow your Attorney’s to manage your assets whilst you have capacity, if you asked them to, or once you lose capacity. You should carefully consider who you wish to appoint as Attorney and ensure it is someone with the knowledge to deal with your digital assets.

Protecting your digital assets after your death

During your life, you should prepare a list of all of your digital assets, complete with all of the log-in information required. This should be stored in a safe place that nobody, other than you, will have access to until you die. Details of how to access the information should be lodged when writing your Will so your Executors are able to access this upon your death. With sentimental assets, such as photographs, you may wish to back these up with hard copies or digital copies to ensure they are not lost.

 

Once you have made a list of all of your digital assets, and how to access them, you should consider what you want to happen to them. You may consider appointing a ‘digital Executor’ to deal solely with your digital assets, this may be someone who is more tech-savvy than your other Executor’s. You may have different wishes for different types of asset, for example you may want your social media account and cryptocurrency account handled by different people, so it is vital you think carefully about who you are appointing.

 

If you have digital business assets such as email addresses or bank accounts, you should consider who would need access to these assets immediately upon your death. If you have a business partner, you should consider informing them of the log-in details to the accounts, or where they would find these details when you die. If you are a sole trader, it is important someone is able to access your accounts to ensure all of your invoices are settled and the monies owed go into your estate.

Will writing and digital assets consideration

What to consider

You need to consider who you want your digital assets to go to. If you are leaving someone your smartphone or computer, they do not automatically have the right to the information on it and you should specify that they are able to access this. 

 

You should look at the terms and conditions of your digital assets and whether they are able to be transferred upon death. Some of your digital assets, such as social media accounts, are unable to be transferred. Facebook, for example, allows you to appoint a legacy to turn your account into a memorial when you die but does not allow whoever is appointed to access your information. Other social media sites will be deleted upon notification of your death, or after a period of inactivity, and therefore cannot be passed. Music downloads and gambling accounts are usually subject to licences meaning you can use them during your life but they terminate upon death and cannot be passed. 

What can happen if you don’t have a plan

If you have a Will that does not provide for your digital assets upon death then your digital assets will form part of the residue of your estate and will pass to your residuary beneficiaries. If there is value to your digital assets these will also need to be disclosed to HMRC.  

 

If your Executor’s find technology difficult then dealing with your assets could be a hard task for them and if you have not disclosed what digital assets you have, and details of how to access them, you risk your Executor’s not knowing about them and them being lost forever. Your assets may include sensitive information which you do not want your Executor’s to know and therefore you do not want this to end up in the wrong hands.

 

If you do not have a Will then your digital assets will be distributed via the rules of intestacy. The rules provide an order for the distribution of your estate on death. Again, this could risk your assets ending up in the wrong hands, or them being lost forever.

Executor’ responsibilities for digital assets

Your Executor’s responsibilities will change depending on the type of asset they are dealing with. They are likely to have to log into an account and if you have not provided log-in details, they will be required to contact the company in order to gain access. Some sites will have strict rules and not allow access to a third-party so again, there is a risk assets could be lost. For other assets of value, your Executors will need to calculate such value and declare this to HMRC.

 

Other issues, such as copyrights or intellectual property rights may arise and it is likely your Executors will need to seek professional help with these issues.

How Can Goughs help?

It is vital that you make arrangements for your digital assets in a Will. If not, you could risk sensitive information getting into the wrong hands, or sentimental assets being lost forever. 

We can help assist you with making a Will that provides for all eventualities as well as giving you professional advice on how to ensure your assets are accessible upon your death. Please give us a call, or come into one of our offices, to book an appointment today.

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Author Bio

Casey Gilroy

I enjoy working in a profession where you are helping people and where no two days are ever the same.

The constant change and new laws mean you are always learning something new.

I enjoy problem solving for my clients to ensure positive outcomes are sought.

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