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What happens to your digital assets when you die?

Even though we may not consider them as assets, our digital assets are just as important as physical assets that you can touch.  They may have a financial or sentimental value to you and your family.  Have you ever considered that these assets should be part of your general planning for what happens when you die or the unfortunate event of losing mental capacity to manage your own affairs?

What are digital assets?

Most of us now access ‘possessions’ on a digital devices such as our computers, tablets and smartphones.  These physical devices, the hardware, are not classed as digital assets.  The hardware will be dealt with in your Will in the same way as any of your other personal possessions.  Digital assets are usually accessed via an online account run by a third party e.g. Netflix, Apple, Microsoft, Amazon.  These ‘possessions’ include photos, videos, music, e-books, blogs, movies, emails, social media accounts, games, loyalty points and online bank accounts, all of which are classed as digital assets.

Can you gift them to someone in your Will?

Whilst you may think you own these assets, the reality is you may not.  When using online services, you will have agreed to terms and conditions which may restrict how you can use the service.  You should review these terms and conditions as there may be specific terms detailing what happens after a period of inactivity and in some cases the digital asset may be destroyed.  A lot of digital music content is enjoyed on a licence basis, so it is not something that you can gift to your loved one, unlike your vinyl collection!

What should you do now?

  • Keep an inventory of digital assets and update it regularly. Of course, this must be done securely and legally.
  • Review your Will. Your digital assets can form part of your estate on death and it is therefore important that you leave clear instructions to your executors about what should happen to these assets when you die.  Digital assets that have financial value need to be included in inheritance tax forms.
  • Should you leave password details with your Will? We do not recommend storing a hard copy list of passwords with your Will.  Instead, you could use an online password manager (an encrypted digital vault) for your various accounts and then store the master password in a  locked safe at home.  Whatever method you choose, your executors will need to be mindful that using your passwords to access your online accounts could breach user agreements and cause security issues.  They will need to carefully check the terms of each provider and follow their procedures to administer the assets in a legally compliant way.
  • Consider whether your executors have the knowledge to deal with your digital assets and if so, make sure it is clear in your Will that you authorise them to administer them. Alternatively, whilst it is not yet binding or enforceable in England and Wales, consider appointing a digital executor in your Will to deal specifically with your digital assets and ensure there is a separation and limitation of powers in the Will, to avoid conflict over who is to collect, get in, realise and distribute the digital assets.
  • Consider backing up your digital assets, for example, by storing your photos on a separate hard drive or disc. Print off hard copies of photos.  Remember, your digital content may be owned by online service providers and this may cause difficulties with your executors accessing the content.

This continues to be a developing area and one which clients are increasingly seeking advice on.  If you would like further information, please get in touch with your usual Wealth Preservation team member.

This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoods.co.uk




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      By completing and submitting this form, you consent to Greenwoods Legal LLP processing your personal data to provide you with the email update services you have selected and any other materials and information about our services that Greenwoods Legal LLP reasonably believes will be of interest to you. You are free to withdraw your consent at any time by emailing mailinglists@greenwoods.co.uk