Protecting Digital Assets After Death [A Guide]
As the internet has become evermore prevalent in our daily lives and routines, digital assets now form a significant portion of many people’s estates. Despite this, there remains considerable confusion when it comes to managing such assets during probate and estate administration.
To assist you in navigating this complex legal terrain, we’ve crafted an in-depth guide on protecting digital assets after death.
What Are Digital Assets?
Digital assets is a term used to describe items that are created and stored digitally, such as on a phone or computer. They can take many forms and more often than not have some level of value attached to them — whether it be sentimental, intellectual, or monetary.
Examples of digital assets include:
- Photos and videos
- Email accounts
- Social media platforms
- Music libraries
- Gaming/gambling accounts
- Cryptocurrency
- Loyalty points
- Software
- Websites and domains
Given their importance, and the potential for some of these items to have significant value (cryptocurrency and websites for business owners in particular), digital assets should be considered just as much part of an estate as physical ones. This is not just to ensure you’ve left valuable items to the people you wish, but that you can also stipulate about how they should be managed.
Key Issues with Digital Assets
One of the main challenges when dealing with digital assets after death is the issue of ownership. The complexity lies in the various terms of service you will agree to upon signing up for the service. Some social media platforms, for example, state they will own all content once it’s been uploaded to their site. Music libraries are often held under licence, which will then expire after you die.
Items that are not owned by you cannot be included as part of your estate, so it’s important to check the terms and conditions of each website to determine who owns what. Anything you do own should be stipulated in your will and placed into a trust if you wish to ensure it’s secure.
Privacy is another issue faced when managing digital assets after death. Many websites won’t discuss account details with executors, which could make transferring assets or closing down the service difficult. Some social networks, like Facebook, have started to allow individuals to nominate ‘legacy contacts’ to deal with an account on their behalf should anything untoward happen — making the process a little bit easier.
Finally, items that have a monetary value (like cryptocurrency) will have tax implications after death. It’s therefore essential to include these types of digital assets as part of a comprehensive wealth management strategy to ensure you’re being as efficient as possible.
Including Digital Assets in a Will
The best method for protecting digital assets after death is to include them in your last will and testament. Provided you own the items, this affords you complete control over how they will be distributed and to whom. Just like physical assets, it will then become the responsibility of the estate’s executor to carry out your wishes when you die.
Any digital assets not accounted for in your will would be distributed according to the rules of intestacy. The intestacy process can be more complex and going down this road could lead to your valued possessions being handed to the wrong person/people, so you need to make absolutely certain that you have everything included.
Tips for Protecting Digital Assets After Death
There are several important points to consider when it comes to protecting digital assets after death. These include:
Create an Inventory
The first thing you should do is compile a detailed inventory of your digital assets. Alongside this, create a document that includes all the relevant passwords and login credentials for these items, as well as instructions on how your executor or personal representative can access them.
Check Terms & Conditions
Be sure to check user agreements and other terms and conditions to ascertain what level of access you can grant your personal representative. It’s also important to work out ownership of your digital assets and whether there are any set procedures to follow after your death. In addition, you should continually monitor any changes to terms and conditions to ensure everything is up to date and compliant.
Seek Legal Advice
Another important step in protecting digital assets after death is the appointment of solicitors. Choosing the right one is essential, so you should look for a company who can help you with all aspects of estate and wealth management — such as the creation of legal documents, tax advice, and succession planning for business owners. This means you can be completely confident you have everything covered and nothing has been left to chance.
Establish Wills & Powers of Attorney
With your legal team on board, the next thing is to draw up the relevant documents that stipulate exactly what you want to happen with your property. The most common forms of documentation are lasting powers of attorney for if you become incapacitated during your lifetime, and a last will and testament for protecting your digital assets after death.
Appoint Executors & Trustees
Choosing the right person to administer your estate is an important part of any probate process, even more so when you’re dealing with digital assets. It’s crucial that you appoint somebody who is competent with technology and can easily carry out the instructions you leave behind. If you do not, you could run the risk of having your possessions distributed in a way that’s against your wishes — or not at all. You may even decide to nominate a ‘digital-only’ executor or trustee whose sole responsibility is to handle the online side of things.
Leave Relevant Instructions
The next step you should carry out is to leave detailed instructions on how to access your digital assets and what you want to happen with them after death. Leaving any ambiguity whatsoever could result in things not being done according to your wishes, which may have a knock-on effect, leading to further issues such as increased tax liability or disputes over company ownership. Working with a specialist solicitor will alleviate this risk.
Carry Out Regular Reviews
It’s important to regularly review your digital asset portfolio to account for any new additions and ensure the instructions you are leaving remain fit for purpose. Ideally, you should be looking to do this on at least an annual basis in order to keep things ticking over. However, it’s also recommended that you carry out this task whenever there’s a major change in circumstances — such as marriage, divorce, or the birth of children/grandchildren.
Protecting Digital Assets During Life
As well as managing digital assets after death, you may also want to think about what to do with them while you’re still alive. If you become incapacitated or unable to make decisions for yourself, it’s important to have a plan in place to dictate what will happen to your online possessions.
The best way to do this is via a lasting power of attorney, which would enable you to stipulate who you want to have control of your assets should you lose capacity.
Comprehensive Estate Management Advice
If you’re looking for guidance with protecting digital assets after death, you need to be completely confident you’re obtaining the best possible legal advice tailored to your unique circumstances. It’s also crucial to work with a solicitor who is experienced across all areas of estate and wealth management to ensure absolutely everything is taken care of.
Our private client team is highly-experienced at providing a full suite of legal services designed to meet your goals. From making a will and setting up a trust, to wealth protection and business succession planning, we build our service according to your unique circumstances and what you want to achieve. As a full service law firm, we’re also able to call on the expertise of other departments where necessary.
To find out more about how Thursfields can help you, get in touch today.
Get In Touch
With Us
Need expert legal advice? Our solicitors are here to help. Get in touch today.