from: Kings Court Trust
When estate planning, there are some things that are essential to include. For example:
- who will inherit any property,
- who may care for a dependent child,
- or what should happen to various personal belongings.
One thing that often gets overlooked is what happens to a person’s digital assets.
So many of us live significant parts of our lives in the digital world – whether that’s by using various social media accounts to store photos or videos, communicating with others via blogs, apps, or emails, or transacting using digital currencies. It’s now the norm, and as technologies develop, we are likely to see an increased number of estates that include digital assets.
Something else to consider is the growing awareness and action being taken around corporate environmental responsibility. Many industries are reducing their reliance on paper and encouraging their customers to opt for digital delivery of statements, bills, and invoicing, making it more difficult to gain access to all assets that may be owned by a loved one.
These are just some of the reasons why modern estates may run into issues.
There are several ways to track and manage your digital assets and plan, including:
- using a service that saves all of your passwords in one place so that an Executor can gain access;
- systems that will send messages to loved ones after passing away; and
- policies in place to access, shut down, or memorialise social media accounts after the account owner passes away.
It all comes down to making sure your digital assets are taken care of in addition to your non-digital assets.
Here are 5 simple ways to create a digital estate plan:
1. Start with a list
A survey by the Office of National Statistics states that 87% of all adults in the UK use the internet daily or almost daily for activities such as email (86%), internet banking (73%), online shopping (82%), and social media (70%). This results in dozens of accounts per person with unique usernames, passwords, and details. While some online activities are more significant than others when it comes to digital assets, it is useful to create an inventory of all important accounts, including usernames, passwords, subscription status, fees, and anything else that would be useful to know.
There are three main categories that digital assets fall into:
- digital records,
- digital property rights,
- and digital property interests.
Digital records
This is anything held on a computer e.g. text, images, video, music, etc. Generally, these have high sentimental value but do not necessarily have any monetary value. Therefore, they do not usually form part of an estate, but should still be included if you want your loved ones to have access after your death.
Digital property rights
These are either intellectual property rights, such as copyrights, trademarks, or patents, or contractual rights like online storage or emails. These may be difficult to value, but the Executor or Administrator should include them when calculating the total estate.
Digital property interests
Cryptocurrency and other virtual currency must be considered and included in an estate plan. The private key that is needed to access these assets should be given to the person dealing with the estate so that they can ensure they’re transferred to the beneficiaries. Learn more about dealing with cryptoassets when someone dies.
2. Next, decide what should be done with each account
It’s natural to want each type of account to be managed differently. Some accounts could be deleted, or others could be transferred to loved ones or business colleagues.
Social media
When it comes to social media accounts, some platforms such as Facebook, Instagram, and LinkedIn offer the option to memorialise an account so that loved ones can still view the profile or leave commemorative messages. Others, like X (formerly Twitter), will deactivate the account when they are notified of a member’s death. It’s worth having a read through the terms of service of any social media platforms to ensure there are no conflicts between the account holder’s wishes and company policies.
Assets with monetary value
It’s wise to ensure these assets are included in a Will so that an Executor knows exactly what needs to be done. For example, should a revenue-generating asset be transferred to a colleague? Should loyalty points be redeemed? Should your online store be shut down? It’s advisable to think about how accounts with the ability to earn revenue need to be handled.
Digital content
With the ease of storing photo, video, and written content on various online platforms, it’s beneficial to note what should happen to everything. For example, should YouTube videos be deleted? What is the plan for the hundreds of photos in Facebook or Flickr albums? What about all other online data? These items are often not considered when someone is planning their estate.
It’s worth noting that many companies offer services that allow you to manage your digital assets, including services that save all of your passwords in a digital vault, which may be helpful. If you have a significant digital presence, you may also want to seek professional advice, as some laws which govern digital assets can be complex.
3. Ensure someone has access
Once you’ve listed your assets and decided how each one should be handled, someone needs to know that an inventory of digital assets and accounts exist and how to access it. This could be the Executor or someone else, but this individual will settle or assist in the settlement of digital elements in the estate. For ease, it is best to refer to a supplementary document that contains all relevant information and details needed to settle a digital estate in the Will.
4. Get professional advice
Speaking to a Financial Adviser or Will Writer is a great place to start to ensure everything is done correctly. They can assist with any language or clauses that need to be included in a Will, along with advice on how to store any wishes safely, securely, and legally.
5. Update, update, update
It’s quite likely that account details (e.g. passwords) could change or that new accounts need to be added to the inventory. Often, this is something we all do without much consideration, but after creating a digital estate plan, it’s vital to keep your digital asset list updated regularly. It can give loved ones considerable peace of mind at an anxious and emotional time.
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