A digital asset is essentially an asset that is owned by an individual but only in a digital format. Digital assets may have both monetary and sentimental value to the individual who owns them.
In the modern world, computers and mobile phones are a part of our daily lives. Most people have a digital presence and understanding what happens to our digital presence when we die is important. However, not everybody may own digital assets at the date of death.
There are ways in which we usually interact with other digital users during lifetime, such as through email, social media or through video calling. Whilst managing these accounts is important to us during lifetime, they are not usually something that can pass to a beneficiary on death.
However, through the use of these accounts and other digital software, digital rights and interests could be created as well as other digital assets obtained by an individual. These may have a monetary value at the date of death and so can be passed to beneficiaries in accordance with the terms of the Will.
Different digital assets can be bequeathed or transferred to the desired individuals in different ways.
Assets with sentimental value
These may be assets such as emails, photos or videos and are usually associated with the device that they are stored on (i.e. computer or phone).
TOP TIP - In your Will, you may leave the electronic devices to certain individuals and so it should be made clear if this also includes access to what is stored on the device.
Assets for social use during lifetime
These may be social media accounts or gaming accounts. The user may use these accounts to produce an income during lifetime, such as influencers, but the accounts themselves cannot be passed by the Will.
TOP TIP – Check with the provider what happens to the account on death. Usually the account is deactivated, but you may be able to nominate an individual who can “memoralise” the account on your behalf. You should also check any user agreements to ensure that your executors are not inadvertently breaching any terms on death.
Assets with intellectual property
These could include domain names, blogs or digital art or software. They only exist in the digital world, but nevertheless have value.
TOP TIP – As these may require specialist advice or a specialist individual to manage them on your behalf, it may be useful to appoint a digital executor in your Will who can have the powers and provisions to successfully manage these assets on your behalf during the estate administration period.
Assets with financial value
These can include online accounts, cryptocurrency or betting accounts. They have a financial value and can be managed by the executors as part of the estate administration.
TOP TIP – Keep account numbers, passwords or access codes up to date and in a safe place as the executors will need these to be able to manage the accounts on your behalf.
Digital assets are still a fairly new concept and so hopefully the processes on managing them will become clearer in the next few years, but in the meantime if you would like advice on providing for these assets in your Will, please get in touch.