When a loved one passes away, identifying their assets is a fundamental part of administering their estate. Traditionally, this might involve looking for property, savings, investments and bank accounts. However, this is increasingly becoming only part of the picture.
The Private Client team at AFG Law has been looking at the growing importance of digital asset investigations during estate administration. Digital assets after death can extend far beyond cryptocurrency, encompassing a wide range of online accounts, financial holdings and other digital property.
Money and other assets can now be held through online payment services, investment apps, gambling platforms, reward schemes and other digital accounts. In some estates, failing to investigate somebody’s digital life could therefore mean that assets are overlooked altogether.
So, what happens to digital assets after you die, and what should executors be considering?
What counts as a digital asset?
The term digital assets is broad. It can include assets with an obvious financial value, as well as accounts containing information or content that may have practical or sentimental importance.
Examples include cryptocurrency, online investment accounts, payment platforms, gambling accounts with remaining balances, domain names, monetised online content, reward accounts and certain intellectual property.
There may also be email accounts, cloud storage, photographs, documents and social media profiles.
The important distinction is that not every digital account is itself an asset that can be inherited. Some assets can form part of the estate, while access to other online accounts is governed by the provider’s terms and conditions.
For an executor, the first challenge can therefore be establishing what actually exists.
Why are digital assets increasingly important in estate administration?
Much of modern financial life no longer produces the paper trail it once did. Someone could have investments managed entirely through an app. They might hold money in an online payment account or have funds sitting in a gambling account. Cryptocurrency could be held in a digital wallet without friends and family knowing it exists. Even examining a device such as a laptop does not necessarily provide a complete picture of someone’s digital holdings.
This is particularly relevant for professional executors. An executor needs to establish the assets and liabilities of the estate before it can be properly administered. If potentially valuable digital assets are missed, the picture of the estate may be incomplete.
What happens to digital assets after you die?
There is no single rule covering every digital asset. What happens depends on what the asset is, how it is owned, the deceased person’s Will and estate planning, and the specific terms applying to the relevant platform or service.
A cryptocurrency holding, for example, raises very different issues from an Instagram profile or Gmail account. Where something is property belonging to the deceased, it can potentially pass as part of their estate. However, an account used to access an internet service may instead be subject to contractual rules about what happens following the user’s death.
Executors therefore need to distinguish between the underlying asset and the account or platform through which it is accessed.
What happens to social media and email accounts after death?
Not all digital assets have a financial value. Social media and email accounts can contain photographs, videos, messages and other information that may have significant sentimental importance to friends and family.
What happens to these accounts after somebody dies depends on the provider and its terms and conditions. Some social media platforms allow an account to be memorialised or deleted, while others allow users to nominate a legacy contact who can take certain limited actions after their death.
Email accounts can present similar issues. They may contain personal correspondence, photographs and documents, as well as information that helps an executor identify other online accounts or financial assets belonging to the deceased.
Some providers allow people to make arrangements in advance. Google, for example, offers an Inactive Account Manager for personal Google Accounts. This allows users to decide what should happen to selected account data after a chosen period of inactivity, including nominating trusted people to receive certain information.
If you have social media profiles, emails, photographs or other online information that you would particularly like your family to retain, or accounts that you would prefer to be closed after your death, it is worth considering these as part of your wider estate planning.
Simply sharing passwords is not necessarily the answer. Access following death can be governed by the provider’s rules, so making appropriate arrangements in advance can make it easier for those dealing with your digital life after you die.
How can digital assets be identified after someone dies?
One of the difficulties with digital assets is that family members and executors may not know they exist. Unlike a traditional bank account, there may be no paper statements or other obvious evidence of an online investment, payment account or other digital holding.
Digital asset searches can help identify accounts and assets that may otherwise be overlooked during estate administration. This can be particularly useful where the deceased managed much of their financial life online or their family has limited information about the accounts they used.
Where relevant, AFG Law can assist executors with enquiries aimed at identifying digital assets as part of the wider administration of an estate. This can help establish a more complete picture of the deceased’s assets before the estate is distributed.
Digital assets with no obvious financial value still matter
Not everything an executor or family wants to deal with will have a monetary value. Photographs, videos, emails and social media profiles may be extremely important to a deceased person’s family even though they are not assets that can simply be valued and sold.
There may also be accounts that the deceased would have wanted closed or content they would have wanted to permanently destroy. This creates another aspect of estate planning, i.e. considering what should happen to your digital life as well as your financial estate.
Should digital assets be included in estate planning?
People are increasingly likely to leave behind a combination of physical and digital property. It can therefore be useful to keep an appropriate record of important digital assets and accounts so that executors know where to begin. This does not mean placing passwords, cryptocurrency private keys or other sensitive security information directly into a Will.
Instead, the aim is to make it possible for executors to identify relevant assets and then take the appropriate steps to deal with them.
Someone reviewing their Will could therefore consider not only who should inherit their property and savings, but also whether they have valuable digital holdings, how these could be identified and what they would like to happen to important digital information.
How AFG Law can assist with digital assets in estate planning and administration
As more of our financial lives move online, considering digital assets is becoming an increasingly important part of administering an estate. Property, savings and traditional investments may only provide part of the picture. A person may also leave behind money or other assets held through online payment services, investment platforms, cryptocurrency wallets, gambling accounts and other digital services.
Identifying these assets can help executors establish a more complete picture of what the deceased owned and ensure potentially valuable accounts are not overlooked before the estate is distributed.
It is also worth thinking about digital assets during your lifetime. Keeping an appropriate record of important accounts and considering what you would like to happen to your digital property can make matters considerably easier for those dealing with your estate after your death.
AFG Law’s Private Client team advises individuals and executors on Wills, probate, estate administration and wider estate planning. If you are planning for your own digital assets or dealing with the estate of someone who has died, our team can advise on the steps that may need to be taken to identify and deal with those assets.