What are digital assets?
Digital assets are your possessions held on a digital device such as a laptop or mobile phone. They can have financial value such as a Paypal account or cryptocurrencies or, instead, have sentimental value such as photographs or emails. You may also access tangible assets via digital online accounts such as banking apps or pension platforms.
What happens to my digital assets on death?
Different rules will apply to the different forms of digital assets:
Tangible devices such as laptops, computers, mobile phones etc.
- You may wrongly assume that specific gifts of such items in your Will or accompanying Letter of Wishes will mean that your chosen beneficiaries will inherit the information contained on such devices. However, the legal definition applying to such gifts will only include the physical tangible asset. The digital assets contained on such devices including photographs and emails etc are intangible and therefore a beneficiary will not inherit the information stored on the device. Instead, if a beneficiary is also to inherit the information stored on a device, it is necessary to specifically include this gift within your Will or Letter of Wishes.
Sentimental digital assets such as photographs or emails etc.
- As explained above, digital assets such as photographs stored on a device are not automatically inherited by your beneficiaries following a gift of a digital device. Instead, a specific gift of such assets must be made in a Will or Letter of Wishes. It is also important to note that email accounts may include valuable information or contain sensitive or confidential messages some with potential to cause distress to your beneficiaries. You may therefore wish to leave your Executors further instructions to delete emails or entire accounts prior to passing on the remainder of the digital asset.
Social Media accounts such as Facebook and Instagram:
- These accounts may only be of sentimental value but it is important to consider what you would like to happen to these accounts on death. Some services allow you to specify a contact who may have control of your account in the event of your death whilst others allow an Executor to request that the account is removed. Facebook or Instagram allow an account to be ‘memorialized’ so that messages can continue to be posted to the account. In some instances a social media profile is automatically deleted after a specified period of inactivity so it is wise to check an account’s terms of service when considering how such digital assets should be dealt with.
Digital assets with monetary value such as Paypal or Bitcoin:
- As above, again it will be necessary to check terms of service to confirm how Executors can encash digital assets with monetary value. It is particularly important with such assets that Executors are easily able to find details of such accounts as, with any asset with a monetary value, they will need to be accounted for in distributions to Beneficiaries and their value may need to be reported to HM Revenue & Customs when obtaining a Grant of Probate to your estate.
Digital assets under licence such as gaming or music accounts:
- Often online accounts are used under the terms of a licence agreement as agreed via the provider’s terms and conditions. For example, when ‘purchasing’ music we are actually buying a right to listen to the music under licence. Such a licence is not usually transferable and therefore it is necessary to check the terms of such licence agreements to see whether it is even possible to transfer such digital assets to your chosen beneficiaries on death.
Digital business assets:
- If you have your own business, the ability for your business to continue functioning following your death may be of great concern. It will therefore be necessary to consider what digital assets will be necessary to be transferred to business partners to allow business continuity. Access to online accounts, software licence keys or client lists etc should be clearly identified within your Will or Letter of Wishes to confirm who should inherit such digital assets within your business.
Crucially, if you do not gift digital assets within your Will, they will fall into the residue of your estate which may not be what you intend. There is also a strong possibility that, without specific mention, such assets will be overlooked or lost. You therefore need to take the time to document these assets carefully and decide how they will be distributed.
How can I pass my digital assets to loved ones?
With all of the above forms of digital assets, your Executors will need to be able to access such information in order to follow your wishes. You may feel that the simplest solution would be to simply share your log in information to your friends and family. However, this not only risks your confidentiality during your lifetime but is also likely to breach the agreements you have signed up to when agreeing to a digital asset provider’s terms of service. Nevertheless, it is clear that, without guidance, it will be very difficult for your Executors to trace all your digital assets. Therefore it is recommended that an inventory of digital assets with details of how these are to be accessed should be stored alongside your Will and regularly reviewed.
Ashfords are able to provide you with further guidance on how to deal with your digital assets and ensure that your Will meets your wishes in the treatment of such assets following death. We are also able to provide guidance on how to complete an inventory of digital assets to assist your chosen Executors in dealing with the wishes contained within your Will.