What are “digital assets” and why do you need to include them in your estate plan?

How many online accounts do you access on a daily basis?

Between online banking, emails, social media accounts, and subscription services, you could be using more than a handful of password-protected “digital assets” every single day. Your devices, too, count as digital assets – from smartphones to tablets and laptops.

Of course, password-protecting your online accounts is crucial, especially in an age of rising fraud and hacking cases. However, NordPass reveals the average person now has 168 online passwords – a huge number to keep track of.

One important factor to consider when reviewing your digital assets is your estate plan. You might already have started forming an estate plan with your financial planner, but in the event of your unexpected passing away, your loved ones may struggle to access your devices and online accounts without prior instructions.

What’s more, Canada Life reveals that most of us are behind the times here. While 95% of Brits have digital assets, only 12% of people with a will have included at least one digital asset within it.

With all this in mind, read on to discover which digital assets you may wish to include in your estate plan and how to ensure your loved ones can access them after you’re gone.

It’s sensible to include both financial and non-financial digital assets in your estate plan

When forming your estate plan, it may help to make an exhaustive list of your digital assets including where the executor of your will, or other loved ones, can find them after your death.

First, it may be wise to count up the number of digital devices you have. Then, start looking at your online assets.

Financial assets you may now solely access online include:

• Subscription services, including TV streaming platforms
• Workplace and self-invested personal pensions (SIPPs)
• Your self-assessment tax return history
• Bank and building society accounts
• Individual Savings Accounts (ISAs)
• Payslips from your employer
• Non-ISA investments
• Credit card accounts
• Premium bonds.

When you pass away, all the data your profiles and accounts have accrued throughout your lifetime will live on.

So, it is crucial for the executor of your will to be able to access any accounts you hold so that they can distribute your estate according to your wishes.

Without the passwords and security questions needed to access them, your executor will likely need to obtain permission from the provider and send a copy of your death certificate, which can take weeks to arrange. Plus, any digital assets your executor doesn’t know about could be left dormant after your death, rather than being distributed to your beneficiaries according to your wishes.

On top of this, you might want to think about non-financial assets, such as:

• Photo albums hosted on a Cloud platform or similar
• Password-protected computer files
• Social media accounts
• Email accounts.

Remember, your social media accounts and photo albums will also remain live after you die. Giving your executor access to these assets may help them to either shut them down or move the memories and photographs to a new platform.

3 helpful tips for ensuring your loved ones can access your digital assets after you pass away

Here are three simple ways to ensure your loved ones, especially the executor of your will, can access your digital assets after you’re gone.

1. List all your passwords and security information, then store the document in a secure location

Firstly, it could be immensely helpful to create a comprehensive document that contains all the passwords, usernames, and security question information that your executor might need.

Crucially, the location in which you store this information should be extremely safe and secure. You might prefer to hand-write this list rather than creating it online, to protect it from any instances of hacking or fraud you could encounter in the future.

In addition, it may be wise to store this document in a secure place, alongside your will, care instructions for children and pets, and a letter of wishes. You could even purchase a safe or lockbox for these, giving the code to your executor in case of emergencies.

Making this “master document” with everything your executor needs to know could be a true act of kindness. In the aftermath of your death, your executor can access all the digital assets they need, without the added stress of going on a password “wild goose chase”.

2. Use a password management tool

If you realise just how many passwords your executor may need to access your digital assets, you could look into protecting them with a “master password” using a password management tool.

Using an extension of your internet browser, you can create a “bank” that contains all your passwords, using just one code to access it. This means you (and your executor) would only need to remember one password in order to access all of these accounts.

While there may be risks associated with online security measures like this, it could be a simple way to ensure your digital assets form part of your estate plan.

3. Update your legacy settings for online accounts where possible

Some online platforms have legacy settings or tools that allow you to nominate a beneficiary to take over managing your account after you pass away. If this is available to you, it could be an effective way to help your executor to carry out your wishes.

If you have a Google account, the legacy tool is known as “Inactive Account Manager”. You can update the settings to notify up to 10 people if your account becomes inactive and decide how much of your data they will be able to access. Alternatively, you can opt for your data to be deleted if your account becomes inactive.

Apple allows you to nominate one person to access your account after you pass away, known as the “Legacy Contact”.

Facebook has three separate options you could choose from:

• Permanently delete your account after you die
• Nominate a Legacy Contact to take over running your account after you die
• In some countries, you can request for a separate memorial page to be set up for friends and family to leave tributes after you pass away.

By updating these settings, you can ensure these digital assets are managed, distributed, or deleted according to your wishes after you die.

Your financial planner can help you form a comprehensive estate plan

With so many digital assets to your name, it may be wise to chat with your financial planner about including them as part of your estate plan.

Your planner will sit down with you and your family to answer any questions you might have about passing on assets, digital or otherwise, to the next generation.

Email us at info@harperlees.co.uk or call 01277 350560 to find out more and we’ll be very happy to help.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, NS&I products, or will writing.