How To Safeguard And Bequeath Your Digital Assets19th Jan 2021
Don’t Forget Your Digital Assets And E-Paperwork
You could be costing your loved ones a fortune if you fail to include digital assets (such as cryptocurrencies) in your will. They may never see the money.
Digital assets are making it harder for executors to share out bequests. Accounts could be harder to find. Or their passwords could go missing.
Dealing With An Estate
Put yourself in the position of your surviving family. Going through all your paperwork and possessions will be a difficult and distressing task for your loved ones…when they are already devastated at having lost you. You may have left them with screeds of complex paperwork when they are least equipped to deal with it emotionally.
The task can be even harder if organisational skills were not your forte and your paperwork is in a bit of a mess. Or if you had your own idiosyncratic filing system which was perfect for you but a mystery to anyone else.
In the past, at least the assets and paperwork were there to see – even if they were in a less-than-orderly state. For your family, it would simply be a matter of time going through old envelopes, folders and boxes stuffed with piles of paper and filing them into their correct order.
Now life can be very different. Your loved ones may be faced with little more than your computer – and no passwords. Nor any hint of what digital assets (or liabilities such as unpaid bills) are tucked away online in your cloud-based accounts.
So when it comes to making your will, it has never been more important to review it with a solicitor and ensure that your executors will be able to access your digital assets after you’ve passed on. Otherwise there’s the risk that your family could lose out.
Most Families Are At Risk!
Here’s a worrying statistic: 93% of people forget to add even basic digital assets such as email or Facebook accounts in their wills. That figure appears in latest research from the Law Society, the independent professional organisation for solicitors.
And that’s just the people who are making a will. The reality is that most people still don’t have a will (despite repeated reminders from probate solicitors). If you die without a will, you risk leaving your loved ones:
- in a difficult financial state
- with a larger Inheritance Tax (IHT) bill than necessary
- with extra paperwork and administration at a time when they are grieving
- with uncertainties that could prompt arguments among surviving relatives
- with no knowledge of your true final wishes or any hope of carrying them out.
How To Add Digital Assets And E-Accounts To Your Will
Don’t put your online account passwords in your will! Once probated, a will becomes a public document for all the world to see. Here’s what to do:
- Bank and building society accounts – make a list of where you have accounts, keep a list of them, tell a trusted loved one. You don’t need to tell anyone your passwords or PINs. Your executors should be able to obtain access to your bank account simply by contacting the bank and proving with a death certificate that you have passed on.
- Gas, electricity, water – again this is simply a matter of keeping a list of the accounts. You do not need to divulge passwords. It is possible for your executors/solicitors to find out the names of utility suppliers if the e-paperwork is missing (but keeping a note makes the process much easier).
- Bitcoin and other cryptocurrencies – this is more complex than normal bank accounts. You could lose your crypto holdings if you can’t log into the accounts. We recommend putting the password(s) in a sealed envelope that your solicitor can then store securely in a fireproof safe. Do not forget to repeat the process if you need to change your password. Remember that cryptocurrencies are not regulated in the UK so it always pays to exercise caution. Seek advice from an independent financial adviser if need be.
Passing On Your Facebook Account
After you have died, your Facebook profile can be passed on to a loved one and ‘memorialised’ – effectively freezing the page in time. The person looking after your profile can:
- control who can post tributes and who can see them
- post additional information or content (in rare circumstances).
Your digital legacy would be in the hands of someone else – whether you want this or not.
So it pays to stipulate in your will what you would like to happen to your Facebook page (and other social media accounts) after you have died. Do you want to be memorialised? Or would you prefer that your profiles were deleted. Family members verified by Facebook can request the removal of a profile.
But just to be sure, it may be worth saving the passwords in a sealed envelope (to be stored in your solicitor’s fireproof safe).
Lasting Powers Of Attorney
A lasting power of attorney (LPA) enables you to nominate a trusted relative, friend or professional adviser to take decisions on your behalf should you ever become unable to do so yourself. There are two types of LPA:
- Property and Financial Affairs
- Health and Welfare.
We recommend that you consider having both because one will not cover the requirements of the other.
The attorney(s) you nominate in your LPAs may be the same people you choose to be the executor(s) of your will. But if they are different, you should ensure that they both know about each other and the roles you have planned for them. You need to ensure that everyone is on the same page.
For this reason, it also makes sense to have one firm of solicitors handling your will and your LPAs.
Get Expert Legal Advice
Worried about safeguarding your digital assets for your family when you die? Contact wills and probate solicitor Anthony Weber, a Partner at Coles Miller.