Digital assets and estate planning
In a digital age, most of us have accounts and personal information stored online. We have email accounts, online banking, photos and documents stored on the cloud and more – all of which could be lost when we pass away if the right steps aren’t taken to ensure they can be dealt with by our loved ones.
A study conducted by the Law Society in 2020 showed that an incredible 93% of people neglect their digital assets when it comes to wealth management and estate planning. Only a few truly understood what happens to their accounts – how a subscription to streaming services such as Netflix or Amazon Prime, for example, might be cancelled when they pass away, and how accounts with social media platforms and ecommerce sites such as Facebook and eBay can be closed.
Law Society president David Greene warned that overlooking digital assets could leave family members unable to access accounts or information that is necessary for Probate, and highlighted the importance of including them in a Will.
If, for example, you regularly invest in crypto currency or use PayPal, it’s necessary for an executor to be able to access your account and identify how much is held there, as well as to deal properly with any money tied up in the account.
So, if you haven’t covered your digital assets in your most recent Will, here’s what you can do to ensure all the necessary information is provided for your executors.
- Document all your digital assets
The first step to ensuring your digital assets are accessible after your death is to create a document that details all your digital assets and how to access them. You’ll soon find there’s much more than you expected once you have included all subscription services, bank accounts, social media and email accounts, loyalty programs, mobile phone apps and online accounts for utilities.
Add the associated username and password to every account on the list and make a note of any answers to security questions that might be required. If, for example, you have a childcare account with HMRC, these will be required.
- Allocate access
Once you’ve created your document, you need to decide how the assets should be distributed, or whether the accounts should be closed and deleted. If you have an online ecommerce business on Etsy, for example, you’ll need to decide if you’d like someone to take that over. You may also want to think about who should have access to digital photos or emails, and whether you’d like social media accounts closed.
- Appoint your executor
You may find that the executor you’ve chosen for your Will isn’t the best person to handle your digital assets. In that case, choose a digital executor to take care of all your accounts in the way that you’ve specified. You can choose to stop here and simply keep your document securely on the cloud, and share access to it with only your executor. Alternatively, formalise it by including it in your Will or adding it as a codicil to the Will.
If you need help with estate planning, chat to a Kent tax advisor today. If you need help with administering an estate, contact a Kent accountant for probate services for assistance.