Are you overlooking your Digital Assets?
To many people, digital assets are seen as being the preserve of those who invest in cryptocurrencies, such as Bitcoin, or those businesses who hold information, whether databases or content, within a digital format.
Those assets can have a significant value, with it being reported at the start of 2021 that the price of bitcoin has reached a record high and now has more value than both Visa and Mastercard. In the case of company assets, the loss or inability to access those digital assets can have an adverse impact upon the business.
In addition, digital assets also include photographs, videos, online payment accounts and social media accounts and so it is likely that we all hold and own digital assets. The danger is that many of us are not recognising the volume, and significant financial value, of the digital assets we own and not properly accounting for these when undertaking estate planning.
"A recent Law Society survey on digital assets shows that just 26% of respondents know what happens to their digital assets after they die."
With only 7% saying they fully understand. Of those surveyed who have a Will, an overwhelming 93% had not included any digital assets in their Will.
These statistics show that digital assets are often overlooked, with many individuals not leaving a plan on how these assets will be accessed or what they want to happen to these assets on their death or if they were to lose capacity. Not only does this then mean that the estate may struggle to recover assets which have a significant value, including Cryptocurrencies as well as business secrets and software, but personal and sentimental assets, including photographs, could be lost to the family.
It is therefore crucial that you provide clear instructions to your executors or attorneys about what should happen to these assets to avoid disputes arising. Examples of questions to ask include:
- What digital/crypto assets do I or my business own, do they have a value and how are they accessed?
- If I have a Will, have I made provision to deal with my digital assets and my wishes?
- Should I prepare a Letter of Wishes to outline my digital/crypto assets and my instructions related to them?
- Do I have a Power of Attorney?
- Should I create secure hard copies of this information or copies of important documents?
- Do I need to arrange for written requests to be made for the transfer of digital/crypto assets?
- What steps can I take to address practical barriers that would prevent access to my digital/crypto assets? For example, listing user names, passwords or key information to allow access.
- What are the legalities involved in accessing my online/crypto accounts? What policies exist on access to personal accounts by my relatives and can steps be taken to address these?
Clearly, one wishes to ensure that items of value, whether financial or sentimental, are preserved and distributed in accordance with one’s wishes but if they cannot be accessed then how is this going to be achieved?
Get in touch
If you would like to discuss any of the points in this article, or if you need any advice on estate planning generally then please contact Oliver Kent or a member of the Private Client team at email@example.com.
Alternatively, click here for more information on the matters our Private Client Team can help you with.