As our lives become more digital, it’s important to consider what happens to our ‘digital legacy’ e.g. our online and digital assets and records, when we pass away.
What are digital assets and records?
A digital asset is a broad term used to describe any personal property stored electronically such as PayPal accounts, domain names, in-game digital assets, digital carbon credits, crypto tokens, nonfungible tokens (NFTs) and rewards programmes.
There is also another commonly used term, ‘digital records”, which is used to refer to items such as social media profiles, website copy, blogs, photos, and email accounts that do not have a monetary value.
In terms of estate planning, these can be broken down into two key areas:
- Those with a monetary value which can impact the tax due on your estate.
- Those with a sentimental or non-monetary value which do not impact the tax due on your estate but must be considered in the administration process.
Whilst assets like online banking and cryptocurrencies have financial worth and can be passed on as part of your estate under a will or the intestacy rules, personal accounts like social media profiles and photo collections carry sentimental significance but don’t form part of your estate for tax purposes.
Without proper instructions, your loved ones may struggle to access or manage your digital assets and records, leaving both your financial and sentimental assets in limbo. Many, however, overlook these in estate planning.
Including digital assets in your Will
To ensure your digital assets are properly handled, start by creating an inventory of all your accounts – everything from investments to banking platforms and social media.
To keep your passwords secure make sure they are either physically stored in a safe cloud-based your Will (often referred to as a “cold” record) or in an appropriately secure cloud-based storage system (often referred to as a “hot” record). If you opt for the latter, you may wish to break your passwords down and record only part on any single platform, requiring your executors to marry them up, for added security.
Consider appointing a digital executor, someone specifically tasked with handling your digital affairs separately from your primary executor. This person will have specific responsibilities, such as deactivating or memorialising social media accounts, transferring digital files, or accessing cryptocurrency wallets, according to your wishes.
Platform-specific challenges
Each online platform operates differently, and many accounts cannot simply be transferred after death. Some social media sites offer options to memorialise accounts, while others may delete them without specific instructions. Reviewing the policies of platforms you use will help ensure your wishes regarding your digital legacy are properly carried out.
Cryptocurrency presents unique challenges due to its decentralised nature. Unlike traditional financial assets, there is currently no institution that can assist with recovering lost digital currency. This makes it vital to securely store private keys or digital wallet information, ensuring they can be accessed when needed, whilst keeping them protected.
Keeping your details up to date
Like physical assets, your digital assets may change over time. Regularly updating your digital asset inventory is key to ensuring everything remains organised and accessible to your personal representatives and/or loved ones when needed.
How we can help
In today’s digital age, planning for what happens to your digital assets and records is just as important as managing your physical estate. Taking thoughtful steps now can prevent significant complications for your loved ones later, ensuring that your wishes are carried out seamlessly and your digital legacies are protected.
Contact our Wills, Trusts & Estates team for more information.