Many of us are now running significant aspects of our lives online. It is therefore increasingly important to make sure our executors can access all our assets by keeping a comprehensive record of our digital assets, particularly those associated with financial accounts.
A good starting point is to make a list of the assets and accounts you hold digitally and to make a record of the log in, password and instructions for accessing these accounts. This record needs to be kept up to date and stored safely. There are numerous (in themselves digital) password manager programmes and Apps available to assist. Crucially details of how to access the ''APP'' should be placed with your important papers to be found in the event of your death (it is a good idea to tell someone close to you where these papers can be found!).
So what ''digital assets'' are there?
Financial Assets
These include cryptocurrencies, online only bank accounts and investment portfolios and revenue-generating online businesses (or even your Paypal and Vinted accounts). Without a clear record your executors might be unaware of these assets, leading to financial loss and potentially penalties if the assets come to light after your estate has been reported for Inheritance Tax (''IHT'') purposes. Additionally, ensuring access to these assets allows for the proper transfer of wealth, helping to settle estates more efficiently and avoiding legal complications.
HMRC recently reported that they require crypto currency accounts such as Bitcoin to be reported for IHT purposes even if the account cannot be accessed!
Personal Assets
Personal digital assets, such as photos, videos, emails, and social media accounts, hold significant sentimental value. They often serve as digital legacies, preserving memories and personal histories. By keeping a detailed record, individuals ensure their loved ones can access and cherish these memories. Moreover, these records can help maintain family histories and provide a sense of continuity and connection for future generations. Apple have a facility where you can nominate a ''Legacy Contact'' in advance which speeds the process of being able to access information once a death certificate has been provided. Otherwise without such arrangements (or having shared your passwords/codes with someone you trust) a grant of probate is likely to be needed to access these accounts and in some cases it is still not possible.
Intellectual Property Assets
Blogs, websites, digital artwork and e-books may have financial value and it is important that your executors can value the estate accurately and take account of these assets too. This is particularly important if you are writing under a pseudonym.
Security
All digital assets will involve some level of security. Digital assets often require passwords, security questions, and two-factor authentication for access. Without a comprehensive record, it may be challenging for executors or family members to retrieve important information or manage these assets effectively. This can lead to data loss, identity theft, or unauthorised access. A detailed inventory, including instructions for accessing these accounts, mitigates these risks by ensuring a controlled transfer of access.
In summary, maintaining a record of your digital assets is crucial for financial security, preserving personal memories, ensuring security, and assisting the legal processes. It ensures that your digital legacy is managed according to your wishes and provides peace of mind to you and your loved ones. Your executors will also need the information about your digital estate in order to fulfil their obligations to HMRC – to account fully, accurately and promptly for all assets in your estate.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.