Digital assets have become a fundamental part of everyday life. However, accessing them after a loved one’s death has become a widespread and global challenge.
As digital assets become more prevalent, and our lives become increasingly entwined with digital technologies, the need for effective solutions becomes ever more critical.
Your clients may not be aware of how many of their assets – from photos, to email accounts, to cryptocurrency – are categorised as digital, or what happens to these assets when someone dies or becomes incapacitated.
Last year, STEP carried out research into estate practitioner views on, and experiences with, digital assets.
This was a joint research project in partnership with the Microsoft-funded Cloud Legal Project at Queen Mary University of London. The findings were published in a report – Digital Assets: A Call to Action.
The findings were striking. Nearly 60 per cent of respondents had clients who asked about digital assets. Yet almost half of respondents had not undertaken any specific preparations or put in place organisational policies to help clients with digital assets in their estates.
Our survey indicates that many practitioners are only beginning to engage with digital asset estate planning.
What advice do clients need about digital assets?
Our research found that clients seek digital asset advice about estate planning and administration, with social media and email accounts topping the list of most frequently asked about assets.
Of the 58 per cent of practitioners that had received queries about digital assets, almost half had been asked for general estate planning advice, and nearly a third had been asked about transferring digital assets after death.
Conversations about data protection and privacy were also common during estate planning.
Clients also asked for help with estate administration. Of the 58 per cent that had received queries about digital assets, more than a quarter had been asked about obtaining access to the digital assets of a deceased person during estate administration.
Client queries most commonly concerned social media or email accounts, as well as cloud storage services containing files such as documents and photos.
Clients also often asked about planning for cryptocurrencies. However, legislation is still uncertain in relation to the location and tax status of some financial digital assets, and your clients should seek specialist technical, legal and tax advice in order to plan appropriately.
Our survey indicates that clients frequently have trouble when trying to access the digital assets of a deceased or incapacitated person.
Nearly a quarter of respondents stated that their clients had faced such difficulties. We asked these respondents to describe the impact on clients, with 79 respondents providing qualitative feedback, with the most common theme being the distress and frustration experienced by clients.
How can practitioners help clients deal with digital assets?
It is important that practitioners are able to guide clients through this challenging process with the requisite support and advice.
The survey findings suggest that, to help clients deal with digital assets, practitioners should consider the following:
Passing on assets to the intended beneficiaries