When considering estate planning, most people will typically include personal belongings, cars, jewellery, and property in their will. But we now live in a digital age, and many of our assets no longer have a physical presence. Often our digital footprint can be neglected when making provisions for after we die, which can cause further issues for those we leave behind.
According to a recent survey from the Law Society, an astonishing 93 per cent of people said they had not made any provisions for their digital assets in their will. Only 25 per cent of respondents said they know what will happen to their digital belongings after they die, and a mere seven per cent said they understand what will happen to their digital assets when they die.
Digital assets have increasingly become part of modern life in the 21st century, and it has become vital that they are carefully considered when estate planning. Here, we have a look at all you need to know about your digital assets and estate planning and help you make sense of this important consideration and avoid issues.
Digital assets are anything that is stored in digital or binary format and often come with a right to use, encompassing online accounts such as email accounts, social networking accounts (Facebook, Instagram, Twitter, etc.), photo sharing websites (Flickr, Dropbox, etc.), and any websites or domain names you own.
It also refers to assets stored on your computer or smartphone as well as online social media accounts, which can include photos, videos, documents (Word, spreadsheets, etc.), instant messages (texts/SMS, Whatsapp, iMessage, etc.), emails, and more.
In most cases, access to these assets will be password protected and only accessible by yourself, and it could be very likely that only you know of their existence.
A growing number of people now have digital assets that have monetary value, from balances on PayPal accounts or on gaming or gambling websites, NFTs (non-fungible tokens), or cryptocurrency wallets, which will all need to be considered when estate planning, such as granting access to these accounts to the executor of your estate.
However, there are some aspects of digital assets in which you might not own what you think. For instance, the music purchased through digital sites such as Apple Music you do not own, only the licence to use the content. This will be the same for any digital versions of movies you buy, as well as eBooks.
The often lengthy and confusing terms of service for social media sites may also stipulate that any photos or media uploaded to your social media accounts are then owned by the company.
Your social media accounts can contain years of memories, photos, and videos that you may want your family and friends to be able to access after you die, while digital assets with monetary value you may want to leave to beneficiaries.
Many social media accounts now allow profiles to be memorialised so that all the content can be viewed, or you might wish for them to be deactivated and deleted after your death. You should consider the available options carefully and take steps to decide who is granted access to them and for what purpose.
If you do not leave instructions, then family members will likely be aware of the more obvious social media accounts and assets and be able to deactivate, delete, or memorialise them. However, it is unlikely they will know or be able to gain access to lesser-known assets, such as cryptocurrency wallets, and specific arrangements do need to be made.
As with any estate planning, the first step is to compile a record of all your digital assets that your executors can utilise after your death. There is now provision for a ‘digital safety deposit box’ where all the usernames and passwords for your accounts can be stored, which can then be made available to your executors or a nominated person after you die.
You can keep a written list of your passwords and usernames, but this poses a security risk with frequently changed, out of date, incomplete, or incorrect passwords. It makes it essential to keep your records of digital assets updated regularly.
You need to identify all digital assets that have monetary value, as well as those with sentimental value, and ensure you have made plans for both types. If you fail to gift valuable digital assets as part of your will, they may fall into the control of the state or even be lost forever.
Digital assets with sentimental value, for example, photos and videos or social media accounts, can be gifted in your will, but ensure you have made provisions to cover this.
You can nominate a family member to deal with your digital footprint in the event of your death. You can also include a digital assets clause in your will that will allow executors to decide who will benefit from any digital assets with monetary value. Or you can leave specific assets to named beneficiaries.
The need to account for digital assets has become increasingly important and can save time and stress for your family after you have gone.
Planning your estate will always benefit from seeking expert advice from a solicitor. Check that they have experience dealing with digital assets as you do not want to neglect this critical aspect of your will, and avoid causing problems for your family further down the line.
If you’re looking for help and advice when planning your digital estate, get in touch with our experts today.
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