What are Digital Assets and why are they important?
Digital Assets are anything which you hold of value which is in the virtual sphere; for example media in the I-cloud, an E-Bay selling account, a PayPal account, Cryptocurrency, an online business or a YouTube account with incoming revenue. If you have one of these or another type of asset which you are unsure whether it is a digital asset then I would urge you to seek professional legal advice as to whether you need to amend or review your Will to take into account this type of asset because it may well be the case that you did not own such digital assets when you made your previous Will.
Protection in your lifetime
If you have Digital Assets it may be prudent to consider obtaining professional legal advice as to whether you need to set up a trust in your lifetime to cover the situation where you are no longer able to make effective decisions regarding these investments or for tax planning. It could be the case that your legal adviser has a simpler option for example the preparation of a Power of Attorney or Lasting Power of Attorney for Property and Financial Affairs to protect you in such circumstances.
Why are so many Wills silent about Digital Assets?
The most common reason I have encountered is the general misunderstanding about whether to include such assets in your Will. Specifically mentioning your digital assets in your Will prevents any doubt as to whether you own such assets and to whom you wish to gift them. If you think your chosen executor is unlikely to feel comfortable dealing with your digital assets then you can appoint a second executor to deal solely with your digital assets.
If these assets are not mentioned and your beneficiaries and your executors do not know about them or how to access them then your entire estate will not be handled and your loved ones may be un-aware that you hold digital assets and therefore they will remain unclaimed. This is also an issue for those individual’s who may find their estates subject to Inheritance Tax as your executors will be unable to file a complete statement to HMRC regarding tax liabilities and further consequences may result from this.
Given the change in people’s circumstances especially in the wake of the ongoing Covid-19 pandemic it is not unusual to find individuals have altered their working patterns searching for a virtual means of income and as such I suspect there will be a rise in digital assets within the next 10-15 years. You only need to see the incline of cryptocurrency and YouTubers to realise that the fact digital assets are not included in the majority of Wills is a problem.
Your legal adviser should be able to at least in your Will appointment advise you to list your digital assets and provide you with information relating to ensuring that people can access these on your passing for example a Deadman’s switch. If you do not think that your legal adviser is able to provide you with this information then seek someone who can- there are legally qualified people who are able to help you.
Your Solicitor needs to know you!
It is important that your legal adviser knows whether you hold digital assets and the usual time to tell them this is when he or she is taking your instructions to prepare your Will or doing lifetime planning. This is often done through a questionnaire but if you think you have assets which are not mentioned on a questionnaire then you need to inform your legal adviser so they can assist you. .
What if I want to change my Will?
It is advisable that you review your Will every 5 years to enable you to take stock of your circumstances and whether any changes need to be reflected in your Will. Your Will can be amended as many times as necessary in your lifetime for a nominal charge. This can be done by contacting your solicitor and providing them with the necessary information to make any changes needed or simply asking for a review of your Will to discuss if a change is necessary in your situation.
If you would like to discuss any aspects of this article with me or my team or if you simply want us to carry out a review of your will then please contact me on 01704 542002.