What are digital assets in a Will?

When writing your Will, you will naturally consider your assets such as your property and valuables; however you should also be considering those online assets that you will invariably use every day that your Executors will need access to. We explain more here about digital assets, the accounts that would be included under this and why the details should be listed alongside your Will.

What counts as a digital asset?

A Which? survey conducted in August 2021 showed that of the 722 surveyed people who had a Will, only 5% had included a reference to their digital assets.  This is despite the fact that 77% said they had sentimental digital assets, such as email, social media accounts or online storage containing photos, and 35% said they had assets of monetary value, such as PayPal.

A digital asset would refer to those assets that are in a digital or online format and come with a right to use.  This would include, but is not limited to, the following examples:

• Photos or videos saved on a device or in the cloud
• Cryptocurrencies, such as bitcoin
• Social media accounts
• Email or instant messaging accounts
• Documents saved on a device or in the cloud
• Digital intellectual property
• Loyalty or bonus schemes
• E-books or music streaming software
• Word documents, spreadsheets or presentations
• Websites or domains you own
• Online banking facilities

Why should I include my digital assets in my Will?

As these online tools will be personal to you, only you may have the login details to access them, and only you may know that they exist.  This could leave your Executors open to financial risk in the future should payments fall due and they are unaware of the debt that could follow.

There are several reasons why your Will should contain details of your digital assets:

• Without referring to them, your Executors will not be able to access the accounts to retrieve anything of note or to close accounts.
• Your digital assets will be treated in the same way as your other assets in your residuary estate and therefore without specific reference will be passed on to the beneficiary that is entitled to inherit.
• You can specify within your Will how you wish the accounts to be managed, for example, you may wish a member of your family to continue to use an account or retrieve photos from an account before it is closed. You can specify who you wish to manage this; your family may find this too difficult a task following your death, so you may nominate a friend to manage the digital side of your estate.
• If you believe there would be information of a sensitive nature but you still wish the asset to be passed to a particular person, you can request that an Executor reviews or deletes certain information before it is passed to the beneficiary.
• A variety of these tools, particularly social media, would hold vast personal information which would remain available to the public and open to security risks or hacks without being closed down.
• For those digital assets with a monetary value, such as PayPal or Bitcoin, it will be useful for your Executors to know how to access that account and how to transfer the remaining balance of monies. The financial implications will be the same as other assets of monetary value in that they will need to be reported to HM Revenue & Customs as forming part of your overall estate when applying for the Grant of Probate.
• For business owners, this can be a particularly important inclusion in your Will to allow business continuity by passing on the digital assets of your business to your partners or shareholders, opposed to them passing to your other beneficiaries under your estate.
• You can appoint different people to manage your digital assets who are not one of your Executors for the remainder of your estate. It would be beneficial to have a person from your life who is familiar with websites and social media.

There can be some confusion over digital assets and where those should be included in future planning.  For example, a laptop, computer or mobile phone would be a tangible asset under your Will and so inherited by the relevant beneficiary.  However, the digital assets stored on the device are intangible and so would not be passed on with the device.  You would need to include a specific gift within your Will or Letter of Wishes for the intangible assets.

What happens to my digital assets without a Will?

Without a Will at all, your digital assets will pass along with the rest of your estate to the person entitled under intestacy rules.  Your Personal Representatives will be faced with closing the accounts themselves following the company procedures, if they are able to, or tracking down the accounts in the first place.  The company policies may mean that while an account can be closed, the items within the account cannot be retrieved before this happens.

How should I refer to my digital assets in my Will?

While it is important to include details about the management of digital assets, you should proceed with caution as to the information included within your Will, as once the Grant of Probate has been applied for, your Will would become a public document.  You can make reference as to the beneficiary of the assets but keep login details or passwords stored alongside your Will as a separate document in a Letter of Wishes or similar document.

Prior to including the details of these assets, you should refer to the relevant terms and conditions as to the process.  Social media accounts, for example, are not owned by the user but instead are licensed and therefore you are not permitted to share your login details as this would risk confidentiality and would breach the agreement of the websites in question.

We would recommend that you keep an inventory of your digital assets with the accompanying instructions as to how they are to be managed or closed down.

What are the Executor’s responsibilities regarding digital assets?

The Executor or Personal Representative is responsible for administering your estate following your death, either according to your Will or the rules of intestacy should there be no Will present.  Your estate will include your digital assets and therefore should be included within the value of the estate when making the application for the Grant of Probate, particularly for those with monetary value as mentioned earlier.

As you can see, making arrangements for your digital assets is a vital part of making a Will and is one that we can advise on as part of the Will writing process.  If you would like to discuss your digital assets or writing a Will, you can contact a member of the team on 01722 412000.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.