Digital assets, ranging from social media accounts and digital currencies to online businesses and multimedia content, have become integral components of our personal and financial identities. However, the specific complexities of managing these assets after one’s passing often get overlooked in traditional estate planning.
It is important to recognise that these intangible assets need to be taken into account as part of a comprehensive and effective estate plan. This will not only help safeguard your online legacy but also provides clear directives for the allocation and management of these assets, preventing potential disputes and complications after you are gone.
Here, we will explore the definition of digital assets and the processes for incorporating them into your will, and highlight the pivotal role of legal advice in managing these assets properly. With a forward-thinking approach, you can ensure that your digital legacy is properly preserved and protected.
What Are Digital Assets?
A digital asset is anything which is stored digitally. Therefore, digital assets encompass a wide array of digital content and rights, each holding value – whether sentimental, financial or practical. Unlike traditional assets, they exist only in a digital form and must be accessed through electronic devices and platforms.
Key examples include:
- Online financial accounts and assets, including bank accounts, investment portfolios and cryptocurrency holdings managed through online platforms.
- Social media and email accounts, including profiles on platforms such as Facebook, X, Instagram, and LinkedIn. These accounts not only hold personal communications and content, but may also possess sentimental value.
- Digital media and intellectual property, including eBooks, digital music, photos, videos and domain names. This also includes creative content such as blogs, articles and digital artworks, which may generate revenue or possess significant personal or commercial value.
- Online businesses, including e-commerce platforms, client databases, and the digital infrastructure of a business. These are pivotal for the continuation of business operations and hold substantial financial value.
- Digital gaming assets, including software libraries, in-game items, characters and accounts in online gaming platforms, which can represent significant investments and possess both sentimental and monetary value.
These digital assets can hold significant monetary or commercial worth; moreover, social media and email accounts often serve as repositories of personal memories and communications, making their preservation or appropriate handling a matter of great emotional significance to families and loved ones. This underscores the necessity of including these assets in estate planning, to ensure the preservation and smooth transition of your digital legacy.
How to Include Digital Assets in Your Will
It is important to note that even if you have left your phone, computer or other digital device to a particular beneficiary, this does not include the digital media stored on that physical asset. If your will does not make provision for your digital assets, they will pass to your residuary beneficiaries, or even via the rules of intestacy. Incorporating digital assets into your will requires careful planning and a structured approach. Here’s a step-by-step guide to ensure that your digital legacy is comprehensively accounted for in your estate planning:
Step 1: Inventory Your Digital Assets
Begin by creating an exhaustive list of your digital assets. This list should include all of your online financial accounts, social media profiles, digital media, online business components, and any other digital possessions. For each asset, note down the necessary access details. This includes usernames, passwords and answers to security questions. Ensure this information is kept secure and updated regularly to ensure that anyone who needs to access these accounts and assets is able to do so in the event of your passing. It is important not to include these details within your will itself. Once you have passed away, your will can become a public document, so keep your inventory in a separate document that your representatives can access when needed.
Step 2: Specify Your Wishes for Each Asset
Determine what you want to happen to each digital asset after your death. Whether it is the transfer of digital currencies, the preservation of social media profiles as a memorial, or the deletion of personal email accounts, your wishes need to be clear. While making these decisions, consider the sentimental significance of certain digital content, like photographs or personal messages, to your loved ones.
Step 3: Understand the Terms of Service Agreements
Check the terms of service for each digital platform. Some platforms have specific policies regarding the account of a deceased person, so you will need to ensure your plans for each digital asset complies with these terms, to avoid legal complications for your executors and beneficiaries. Some platforms, such as Meta (formerly Facebook) have their own procedures in place as to how profiles can be managed after death, and you should consider these in addition to providing for your digital assets in your will.
Step 4: Appoint a Digital Executor
Appoint a digital executor who will be responsible for managing your digital assets. This person should be technologically capable, with a good understanding of managing digital assets and accounts, and trustworthy to deal with the sentimental and personal aspects of your online media. You will also need to make sure your will grants explicit permission for your digital executor to access your digital assets and accounts.
Step 5: Regularly Update Your Digital Asset Plan
Digital assets and online platforms evolve rapidly. Regularly review and update your digital asset inventory and your will to include new assets or account changes. Also, ensure that your executor knows how to securely access the updated list of your digital assets and their login details.
By methodically following these steps, you can ensure that your digital assets are effectively included in your will, providing clarity and ease for your executors and peace of mind for you, knowing that your digital legacy will be handled according to your wishes.
What Are the Executor’s Responsibilities regarding Digital Assets?
Navigating the digital landscape as an executor can be a complex and demanding task, extending beyond the traditional responsibilities to encompass unique challenges and duties. As such, it is important to ensure that you have appointed a person who is appropriate and competent in dealing with digital assets.
The executor’s primary duty is to manage and distribute the deceased’s estate in accordance with the terms of the will. Applied to digital assets, this means securing digital property, understanding the value and nature of digital assets, and ensuring their proper distribution or management as per the deceased’s wishes.
The executor will rely on information provided in the will or estate plan, such as usernames and passwords, to access digital assets and manage them in a way that honours the decedent’s wishes, and provides for the stated beneficiaries. This could involve transferring ownership of digital assets, archiving personal content, or even closing certain online accounts. For digital assets with financial value, such as online business components or cryptocurrency, the executor must also handle valuation, taxation and distribution.
In all of this, the executor has a responsibility to adhere to the legal guidelines surrounding digital assets and access rights, while ensuring privacy and respect for the deceased’s digital legacy. In most cases, this will necessitate seeking expert legal advice to ensure these assets are managed appropriately, in accordance with the relevant laws and the deceased’s wishes.
Why Must I Include Digital Assets in My Will?
The inclusion of digital assets is a critical component of comprehensive estate planning. As our lives become increasingly digitised, failing to plan for your digital assets can lead to complications and oversights that may undermine your legacy and intentions.
- Digital assets can hold substantial financial value. Without clear directives in your will, these assets may be overlooked or mismanaged, potentially resulting in financial loss for your estate and beneficiaries.
- Many digital assets hold profound sentimental significance. Including these assets in your will allows you to decide how this content is preserved, shared or deleted, ensuring that your personal legacy is honoured and your privacy is maintained, according to your wishes.
- Identity theft and account misuse are common problems online. By detailing the management of your digital assets in your will, you provide clear instructions for securing or closing your digital footprint, significantly reducing the risk of posthumous fraud or misuse of your digital identity.
- The absence of clear instructions for digital assets can lead to legal challenges and emotional distress for your loved ones. Ambiguity in handling these assets can spark disputes among beneficiaries, create hurdles in accessing important content, and burden your executors with complex decisions.
As the digitalisation of assets continues to accelerate and evolve, the importance of accounting for this in your will becomes more and more important. This is not just about addressing the needs of today, but also about embracing the future of estate planning, and ensuring that your estate plan remains relevant and effective.
The Importance of Seeking Legal Advice
Including digital assets in your will is a nuanced process that extends beyond mere documentation. It demands a thorough understanding of legal frameworks, technological standards, and the evolving nature of digital property.
Legal professionals specialising in estate planning are well-versed in the subtleties of digital assets, and how they interact with complex succession planning considerations. They provide tailored guidance that reflects your unique digital footprint, ensuring that every aspect of your digital legacy is accounted for and protected. Their expertise extends to understanding the legal implications, tax considerations and potential challenges that may arise in managing digital assets, as well as helping to keep you up to date on any emerging legal changes and policy shifts.
By working with an experienced solicitor, you can make sure you are able to develop a well-crafted estate plan that is inclusive of digital assets, significantly easing the administrative burden on your executors and reducing the risk of confusion or conflict. With the right support and expertise, you can navigate this new frontier with confidence, knowing that your legacy—in all its forms—is in competent hands.
Image Credits: Melinda Gimpel