This is a question that is not asked enough. While it is common to think of what will happen to physical items that you own, have you considered what happens to your digital assets and content after you die and whether the executors of your estate can access it? It is easy to forget about the intangible assets and our digital footprint, but it is important to consider what happens to things such as cloud-stored photos, digital currency or online accounts.
What are digital assets?
Digital assets can be those with a financial value, such as cryptocurrency, PayPal accounts or online gaming accounts. In 2020 the Financial Conduct Authority (FCA) published a research note stating that there is a rising number of UK consumers holding digital assets. The research found that up to 5.35% of consumers are holding digital assets such as cryptocurrency, so in absolute numbers this means the number of consumers grew to around 2.6 million people.
It could also be digital content with a sentimental value such as social media accounts that store photo albums, including Instagram and Facebook.
Our digital footprint will only increase over time as we store more in digital form. However, the laws on death in the UK are yet to catch up with technological world we now live in.
What happens to cryptocurrency, social media and cloud-based accounts when you die?
On your death, your assets (including chattels) pass to the executors that you appoint in your will (or to the administrators if there is no will). Your executors/administrators will then distribute your assets in accordance with the wishes in your will or in accordance with the laws of intestacy.
However, when it comes to digital assets and social media accounts, it will be controlled in accordance with the terms and conditions that you accept when you first sign up and will not pass to your executors in the same way as your tangible assets.
Policies for social media accounts can range from the memorialisation of the account after your death, to the deletion of the account and all content. Some providers have their own processes such as allowing a you to nominate someone to have access to your account after you die. Some assets you use may be via licences rather than owned, such as an iTunes account. Generally, these would be non-transferable and would likely terminate on your death.
With regards to cryptocurrencies, steps should be taken to ensure these assets are not lost on death. In addition to identifying and making a list of said crypto assets, you should also leave instructions on how they can be accessed (i.e. how your executors can obtain the key for the crypto currency wallet). When storing information on accounts you must ensure they are updated regularly so that all public and private keys for the accounts remain valid.
In 2019 the death of Gerald Cotton, the owner of Canada's largest cryptocurrency exchange left approximately £145 million of cryptocurrency locked in a digital wallet. It was reported that on his death, only he had the password to the digital wallet. As a result, the exchange was unable to pay customers what they were owed. The death of Mr Cotton showed that having a single person owning this information and not making provisions for information to be accessed by his/her executors, risks large amounts of money being lost in the event of death.
What you can do
To ensure all your assets, whether digital or not, pass to your chosen beneficiaries you should make a will. If you have several digital assets in your estate, it would be prudent to choose an executor who is technically-savvy. Make a list of all your digital assets as this will help the person dealing with your estate.
When making a list of your digital assets, make sure you store it safely. For passwords, you could consider signing up to a password manager service. These allows you to store your various passwords securely, whereupon you are provided with a master password. However, for any storage or password manager service, make sure whoever is dealing with your assets on your death has access to them.
You should follow the guidance from the relevant internet service platforms that you use to ensure your information can be accessed and any contents passes according to your wishes. If the service provider allows for your account to be memorialised, you should communicate your wishes to your executors and leave relevant instructions or any applicable message for them to post.
It is important to regularly review your assets and your will. You should also seek advice on how to deal with your digital assets and what provisions you should put in place during your lifetime.
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