At DLS Solicitors, we understand the importance of providing clear, concise information about the intricacies of probate, especially concerning the increasingly relevant area of digital assets. This guide aims to demystify the process and inform executors and beneficiaries about what to expect when dealing with digital assets during probate.
Understanding Digital Assets
Before delving into the specifics of probate, it is crucial to define what constitutes a digital asset. Digital assets include a wide range of electronic possessions such as online accounts (social media, email), digital collections (photos, videos, music, ebooks), cryptocurrencies, and online banking or investment accounts. With the digital aspect of our lives growing, the importance of these assets in estate planning and probate cannot be overstated.
The Legal Framework Surrounding Digital Assets in the UK
UK law is adapting to encompass the digital realm within estate management and probate processes. The legal treatment of digital assets during probate is governed by a combination of the deceased’s will, the terms of service agreements of the digital asset platforms, and applicable UK laws, including the Data Protection Act 2018 and the GDPR.
Inclusion of Digital Assets in Wills
One of the most straightforward ways to manage digital assets after death is by including them in a will. This process involves specifying digital assets and their respective beneficiaries, alongside traditional assets. It is also advisable to leave instructions or wishes regarding the management or deletion of online accounts. However, it’s essential to never include passwords or sensitive information directly in the will, as it becomes a public document after death. Instead, a secure method of sharing this information should be arranged.
Probate Process for Digital Assets
Inventory of Digital Assets
The first step in managing digital assets during probate is to compile an inventory. This should detail all known digital assets and their access information. This inventory will assist the executor in determining which assets are transferable to beneficiaries, subject to the deceased’s will and platform-specific policies.
Accessing Digital Accounts
Accessing a deceased person’s digital accounts can be complex. Many digital service providers have strict policies in place regarding account access following the account holder’s death, often requiring specific documentation, such as a death certificate and proof of executorship, before granting access or disclosing information.
Transfer or Closure of Digital Accounts
Whether a digital asset can be transferred to a beneficiary or needs to be closed depends on the platform’s terms of service and the deceased’s instructions in their will. Each platform has its own policy; for example, some social media networks allow for the creation of a memorial page, whereas others may simply close the account on request. Digital currencies and online bank accounts may be transferred to beneficiaries, following more traditional probate procedures, but again, this is dependent on the terms of the service agreement.
Tax Considerations for Digital Assets
Like physical assets, digital assets may be subject to inheritance tax, depending on their value and the overall estate value. Executors should ensure that digital assets are accurately valued and reported to HM Revenue and Customs (HMRC) as part of the probate process.
Conclusion
Handling digital assets in probate is a complex process that requires careful consideration and planning. As the digital world evolves, so too do the laws and practices surrounding digital assets in estate planning. At DLS Solicitors, we recommend seeking professional legal advice to ensure that digital assets are managed correctly and in accordance with the deceased’s wishes and UK law.
If you have any further questions or require assistance with managing digital assets in probate, please do not hesitate to contact us.
