Navigating Digital Legacies: Advice for Estate Planning with Digital Assets

In today’s digital era, nearly everyone engages in digital activities. Users of all ages routinely use their devices to carry out daily tasks online, whether it’s online financial housekeeping, or uploading photos to the cloud.

Prominent in our daily lives, digital assets hold significant value and importance. However, many individuals overlook the inclusion of these assets in their estate plans, leaving their loved ones grappling with access issues and legal complexities after their passing. As an adviser, how can you ensure your client protects their digital livelihoods at the time of their passing?

What are Digital Assets?

Let’s begin by discussing what digital assets really are. In essence, digital assets refer to any form of electronic records or content that hold value or significance; they can range from financial accounts to social media profiles. As the term is quite broad, let’s categorise the assets into monetary and sentimental.

Assets of monetary value:

• Financial Accounts: This category includes traditional bank accounts, investment portfolios, retirement accounts, and digital wallets. These assets have direct monetary value that can be passed on to loved ones through a will or other estate planning mechanisms.
• Cryptocurrency: Cryptocurrency is a monetary asset and can be included in a will but accessing it after death can be complicated. Private keys should not be shared for security reasons, but instructions can be left in a secure location. Some cryptocurrency insurance firms offer services for passing on cryptocurrency assets. It is important for your client to be aware of the terms and conditions of their account provider.
• PayPal: Money in PayPal accounts can be accessed after death by the executor of the estate, who can request a cheque or transfer to a linked bank account.
• Loyalty points: Some loyalty points, like Tesco Clubcard and Nectar points, can be transferred, while others cannot. It’s important for your client to check the terms and conditions of their loyalty cards before considering including loyalty points in a will.

Assets of sentimental value:

• Email accounts: While email accounts may contain important correspondence and personal information, they are often considered sentimental assets rather than monetary ones. Access to email accounts after death can be managed through programs like Google’s inactive account manager.
• Digital photos and data: Stored photos on cloud platforms may be accessible by designated individuals through programs like Apple’s digital legacy feature or Google’s inactive account manager.
• Social media: Platforms like Facebook and Instagram allow users to designate a legacy contact who can manage aspects of their account after their passing, such as adding a pinned post, updating profile information, and requesting the removal of the account.

Be aware that there will be some assets your clients will not be able to pass down to their loved ones due to specific terms and conditions. For example:

• Digital music/films/books: These assets typically cannot be sold or transferred to another account, as stated in the terms and conditions of the service providers. This means that it’s unlikely anyone will be able to inherit them directly.
• Social media assets: While some social media platforms allow users to designate a legacy contact who can manage certain aspects of their account after their passing, such as adding a pinned post or updating profile information, the legacy contact cannot log in to the account, read messages, or make significant changes. Additionally, the terms and conditions of social media platforms may dictate that the account and its contents are owned by the platform rather than the user, making it difficult to transfer ownership or access to loved ones.

Facebook, once made aware of a person’s passing, memorialises the account automatically, making it a place where people can gather and share memories of the deceased person. It also offers the option of legacy contacts, which allows someone else to be appointed after death to manage the account. A legacy contact can also request for the account to be permanently removed from the platform. Instagram, owned by Facebook, operates in an almost identical way, and Twitter enables a family member to deactivate an account if proof of identification is provided. It is important for your client to be aware of the terms and conditions tied to the platforms that they use.

Digital Estate Planning: Starting the Conversation with Clients

Step 1: First and foremost, advise your clients to compile an inventory of their digital assets. This should include a list of names, usernames, account IDs, email accounts, subscription services, blogs, online stores, credit cards, currency cards, and any other relevant digital accounts they have. You should advise your client to include all online accounts, and the associated login information for those accounts, however, not to include them in the will itself due to the public nature of wills after one’s passing. Instead, stress the importance of noting this information on a separate accompanying document, which could be safely and privately accessed by their executor.

Step 2: Next, encourage your clients to appoint a digital executor in their will. This individual should be not only trustworthy and reliable but also familiar with navigating the digital landscape. The digital executor will be responsible for managing and distributing the client’s digital assets according to their wishes.

Step 3: Inform your client of the terms and conditions surrounding social media accounts, and consider any legacy contracts associated with them. As mentioned above, social media platforms often have specific terms and conditions regarding account ownership and access after death, so it may be impossible for executors to access these accounts without the client’s password, yet sharing passwords may breach terms of service. Ensure you and your client are aware of the different conditions surrounding their social media accounts.

Choosing an Executor: How should your client decide?

As the testator, your client’s role is to identify and document digital assets, and communicate their wishes clearly in their will, outlining how they want their digital assets to be handled after their passing.

The executor’s primary responsibility is to carry out the instructions outlined in the will regarding the testator’s digital assets. This may involve accessing, managing, and distributing digital assets according to stated wishes. The executor may need to liaise with service providers, such as social media platforms and financial institutions, to facilitate the transfer or closure of accounts. By carefully selecting an executor who possesses the necessary skills, trustworthiness, and availability, your clients can ensure the effective management and distribution of their digital assets.

When advising your clients on selecting an appropriate executor for their digital assets, advise the client to:

• Prioritise individuals who are digitally literate and comfortable navigating online platforms, as they will need to manage and distribute your digital assets effectively.
• Select someone who they trust implicitly to handle sensitive information and carry out their wishes.
• Ensure the chosen executor can communicate effectively and is willing to communicate with service providers and beneficiaries upon death.
• Ensure their chosen executor has time available to effectively manage their digital assets.

In conclusion, it’s important for advisers to educate and guide clients through the process of managing their digital assets when estate planning.

Encouraging clients to compile comprehensive inventories, appoint suitable digital executors, and stay informed about evolving digital estate planning strategies will ensure you provide an excellent service and that their wishes are carried out effectively.

Remember, our team is here to assist with any queries, and we offer specialised training to keep advisers up to date with the latest developments in this rapidly evolving field. You can read more about our specialist services here, or contact us directly.