What Happens To Digital Assets When You Die? Part IIII

Crypto Currencies 

We have written articles in respect of the above, as modern estates often have a digital aspect to them, and this will continue and increases as time passes by. 

We have discussed various ownerships of potential digital assets, but one area where ownership rights are clearer is Crypto Currencies. 

Assets such as Bitcoin will remain available after death and can be passed on, but the contents of the wallet can only be accessed with a private key. If somebody dies and does not provide access to the key to their executors, Bitcoin assets will be lost. Therefore, if a person has this type of asset, options should be considered to fall stall this, including the owner simply writing down the key somewhere safe, storing it on a flash memory drive that will be found by the loved ones or the executors or advisors, or entrusting it to a Commercial service. 

Other assets to consider include online gaming accounts. Many people do not realise that their estate might now include Digital Assets of significant value, such as online accounts and characters on online games such as ‘World of War, YouTube videos and photographs of celebrities. The question is how to value these assets. 

As with physical assets, digital assets need to be assessed in relation to their tax treatment. Unlike many Digital Assets, which have a purely sentimental value, Bitcoin has a financial value, and will be subject to Inheritance Tax.  

HM Revenue and Customs has already produced guidance on the taxation of Crypto assets, confirming that these assets are to be treated as property for the purpose of Inheritance Tax. 

Passwords are the key to helping your executors and relatives manage your estate after death, ranging from those for Social Media accounts and email accounts, and retail accounts such as Amazon and PayPal. Password managers, such as – Lane, Last Pass, Stickie Password, I Password, encrypt and store logins for all of these, as you only have to remember one password. 

It is of course very important that the person using the one password has provided this to the next of kin or executors, otherwise the exercise is completely worthless. 

These organisations are software that encrypts this master password, and stores it only on your devices, meaning that even if the password manager is hacked, your assets should be safe. 

We believe that passwords should not be included in wills, as they become a public document on the Grant of Representation being issued by the appropriate Probate Registry. 

We believe that these sensitive words should be included in a private letter of wishes. A common alternative, many people disclose passwords to a nominated executor or to a loved one, to ensure that the assets can be passed on. 

Many people heading into later life agree a Power of Attorney for their finances – typically a family member or trusted advisor – who can manage their affairs in the event they no longer have their capacity to do so themselves. 

Though Power of Attorney ceases on death, it can also help families sort out digital assets, since attorneys may have been able to operate accounts, or have them entrusted with key passwords. 

There is now within the market place, various companies which will in effect manage the digital assets and passwords in your lifetime, you can have the website that will draft a will, store documents, index accounts, social media and photo libraries, using an asset calendar to leave a summary of your estate, find a wealth manager and direct your charitable legacies.  

In conclusion not preparing your digital legacy could cause a great deal of stress for your loved ones after you have gone. Often the surviving members of the family are not aware of the complete list of these types of assets, which may or may not have some real value. 

If you require assistance or advice, please do not hesitate to contact us. 

If you need any assistance please contact us.