Why Planning for Your Digital Assets Matters
In a world where everything from bank accounts to cherished family photos is often stored online, understanding what happens to digital assets when someone passes away is crucial. This article provides an overview of what happens to digital assets and explains the provisions that can be put in place during one’s lifetime to protect them.
What are digital assets?
Digital assets include any possessions which exist in a digital format. Some examples of these include:
- Social media accounts
- Email accounts
- Online banking accounts
- Cryptocurrency such as Bitcoin
- Photos, videos, e-books and music library
- A loyalty scheme, such as Asda rewards
- Any content on any websites such as Amazon, eBay or Google
Just like your financial assets and property, digital assets are considered part of your estate when you die. However, different assets come with various terms and conditions set by their service providers, which can lead to complications if the assets have not been specifically assigned with the correct information.
For example, cryptocurrencies are stored in digital wallets protected by private keys. This means that without this private key, it will be nearly impossible for an executor of a will to access these funds. Several other service providers implement strict access control restrictions, making it very difficult for anyone to access these accounts without passwords and passkeys being provided prior to the passing.
How to protect your digital assets
Firstly, it is important to keep a record of all your digital assets, along with the relevant login details, account numbers, and passwords throughout your life. This information can then be stored securely until your death. The details regarding where to find this list can be included with your will.
The next step is to consider what you would like to happen to each specific asset. You could appoint someone to manage only your digital assets. This can be a good idea in situations where the executors you have named are not the most proficient with technology, and you know someone who is more tech-savvy to handle these assets efficiently. It is important to take great care when deciding who should be given the authority to manage the different assets, as no digital asset is the same, and different individuals may be suitable for different assets.
Wishes regarding what you would like to happen to the assets can also be included in your will, but it is important to note that each asset has various terms and conditions attached to it, particularly concerning whether they can be transferred upon death. For example, social media accounts will generally be deleted upon notification of death and, therefore, cannot be transferred. This can also apply to music downloads and gambling accounts, as they are usually subject to licences, meaning they can be used during a person’s lifetime but terminated upon death.
Facebook, however, has introduced a system whereby accounts can be memorialised upon notification of death. A profile that has been memorialised provides a place for friends and family to gather and share memories after a person has passed away. This can be achieved by choosing a legacy contact who will manage your memorialised profile, highlighting the importance of taking these actions during one’s lifetime.
For business owners, these points can be even more important given that many businesses are heavily reliant on digital tools and platforms. Considering who will take over your digital business assets upon your death is a crucial aspect of estate planning that requires careful thought.
If a will is created that does not account for your digital assets, those assets will simply become part of your residual estate and be passed on to your residuary beneficiaries. This raises a concern that such assets could be lost forever if no one is aware of their existence.
Planning who will inherit your digital legacy is a crucial aspect of estate planning. By taking these proactive steps during your lifetime to ensure the organisation and documentation of these assets, you can guarantee that your digital assets are handled according to your wishes.
Protect Your Digital Legacy with Expert Guidance
Planning what happens to your digital assets is an important part of your overall estate strategy. Whether you need help organising your digital accounts, appointing a digital executor, or including clear instructions in your will, the Private Client team at Nantes is here to guide you every step of the way. For personalised advice, call us on 01305 771000 or visit our contact page.
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