How many of your assets are digital?
Posted on 8th October 2021
Social media and email accounts, cryptocurrencies, and photographs stored in the cloud are all digital assets.
Although they are an important part of our lives, we probably haven’t given much thought to what will happen to them if we die or are unable to make decisions about them.
Joint research by the Society of Trust and Estate Practitioners (STEP) and the Microsoft-funded Cloud Legal Project at Queen Mary University of London has looked at the practical issues surrounding digital assets for estate planning.
The aim is to understand the risks and challenges digital assets represent in estate planning and administration.
Digital assets and estate planning
Professionals are expected to provide clear advice about digital assets and demand is expected to increase significantly. Social media and email accounts are the most-asked-about digital assets.
Family members and beneficiaries frequently find it difficult to access digital assets when someone dies or is incapacitated, which can be very distressing and upsetting. In many cases third-party digital service providers create multiple practical, procedural, and legal problems for both estate planning and administration.
There’s no doubt that knowledge and experience amongst practitioners can be varied, so there’s also a need for education and policies, practices, and tools to help their clients deal with the digital assets of a loved one.
Recommendations for digital asset management
STEP has recommended a three-stage approach to help improve understanding of the issues and to provide solutions through education, collaboration, and legislation.
Education - best practice needs to be collated and shared so that family members and friends receive consistent advice and support. In many cases we have little knowledge of what digital assets we hold or what happens to them when we die, so we don’t make any provision for them. Public awareness needs to be raised more widely about these issues and their implications.
Collaboration - estate planners and administrators urgently need to collaborate with digital service providers to discuss the issues and to find effective solutions. Digital providers also need to create clear procedures to deal with assets when someone dies. Jointly they can create legal, practical, and technical solutions that will work for families.
Legislation - clear rules are needed concerning digital asset property rights and access for personal representatives. The Law Commission of England and Wales is currently at the pre-consultation stage of a project concerning digital assets. The Commission will make recommendations about how the law can accommodate ‘cryptoassets’ and other digital material. It will consider whether digital assets can be ‘possessable’ which could create a market for them. There’s also need for consistent international standards concerning the ownership, control, and management.
While there’s still a lot of work needed to understand and manage digital assets, you can help your family and friends by including their details in your Will.
Please get in touch if you would like to know more.
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