Leaving formal instructions for what should happen to your possessions on your death is a vital task, but it is estimated that fewer than half of adults in the UK have drawn up a Will. Furthermore, even when a valid Will is in place, some of the most forgotten items when drafting a Will are digital assets, also known as your digital legacy.
Your digital legacy is the online information you will leave behind after you pass away, from social media and email accounts, websites, or blogs, to photos, cryptocurrency and NFTs. All these can be categorised as digital and should be added as directions in your Will, with particular care taken on those with specific financial value. Granting access to your online accounts to someone you trust might help ensure that photos, videos and valuable files or investments remain accessible and are not locked behind a password without hope of retrieval.
It is thought that over 90% of adults in the UK were internet users in 2020, and a reported 84% of us are active on at least one social media account. Recording your wishes concerning your digital assets can ensure it is practically and emotionally less stressful for your family and loved ones to deal with these after you are gone.
How can you deal with digital assets?
Successful estate planning requires efficient communication regarding your wishes about digital assets, just as you would regarding any other part of your financial estate or sentimental belongings.
Begin by completing a digital assets inventory, splitting them between those you believe have a financial value and those with sentimental value. Financial digital assets could be, for example, travel rewards, cryptocurrency, NFTs or other digital business assets (such as domain names, websites, and blogs). Digital assets with sentimental value could include digital photos, videos, and social media accounts. Ensure explicit instructions are left for your executors regarding where these accounts are held and how to get access to passwords. To keep password and account details safe, consider using a legacy tool that companies like Meta and Google already have available.
It would also be beneficial for you to make or update your Financial Property & Affairs Lasting Power of Attorney, providing explicit authority for the attorneys to deal with your digital assets should you lose mental capacity.
When drafting a Will, Lasting Power of Attorney or setting up a Trust, seek specialist legal advice from a regulated professional who can ensure all traditional and digital assets are dealt with appropriately. It is vital to ensure the correct tax treatments are applied to digital assets, especially those with financial value, such as cryptocurrency holdings, which may be subject to Capital Gains Tax. Mistakes or forgotten assets can be highly complex and stressful for loved ones to deal with, so seeking specialist legal advice is highly recommended.
Digital Asset Estate Planning Solicitors
At Phillips Lewis Smith, our highly experienced estate planning solicitors have specialist knowledge of this complex area of law. We can help you with all aspects of Wills, Trusts, and Inheritance Tax Planning. For further information on leaving a digital legacy and other efficient inheritance planning methods, speak with one of our Wills and Estate planning team today. Call us on (0)20 7925 2244 or email us at Office@plslex.com and we will contact you.
This article is not attended to be taken as legal advice or acted upon. If you require further advice in this area, please contact our team of Solicitors.