How you can help your clients deal with their digital assets

Digital assets are now a fundamental part of most people’s lives. Your clients may not even be aware of how many of their assets, from photos to cryptocurrency, are digital. But what happens to these assets when someone dies or is incapacitated?

Last year, the global membership body 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 striking. Nearly 60% 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 estate practitioners are only beginning to engage with digital assets.

The survey results led to STEP launching a campaign calling on the public to plan what will happen to their ‘digital memories’. These are the precious photos, videos and the contents of social and email accounts that could otherwise be lost to the cloud after they have gone.

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-asked-about assets.

Of the 58% of practitioners that had received queries about digital assets, almost half had been asked for general estate planning advice. Nearly a third had been asked about transferring digital assets after death. Conversations about data protection and privacy were also common during estate planning.

Of the 58% of practitioners that had received queries about digital assets, over 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 often asked about cryptocurrencies.

How can estate practitioners help clients deal with digital assets?

These findings suggest that, to help clients deal with digital assets, estate practitioners consider the following two questions:

1. What can clients do during estate planning to ensure that their digital assets pass to the intended beneficiaries?
2. What steps can clients take to obtain access to the digital assets of a deceased person during estate administration?

1. Passing on assets to the intended beneficiaries

When helping clients plan their digital assets, here are some useful tips to consider:

1. For financial-related information, only list the names of the institutions and their contact details. Exclude all account numbers and any sensitive financial data from the inventory.
2. Keep the inventory and related documents in a folder. Advise clients to keep the folder locked in a file cabinet or safety deposit box. Ensure that the executors know where it is located.
3. Have a flash drive or other storage device holding the same information as additional backup to the folder.
4. Keep the digital assets inventory up-to-date and remind clients not to include passwords or privacy keys. Clients should leave separate instructions for the executors on how to access the digital accounts and wallets.
5. Do not include any specific details of digital assets or cryptocurrencies in the will. If possible, include general instructions on how the client would like the executors to administer them.
6. Advise clients to make a Financial Property & Affairs Lasting Power of Attorney providing explicit authority for the attorneys to deal with their digital assets.
7. Include a jurisdiction-specific digital assets clause in each of the client’s will, power of attorney, and trust agreements.

You can also help ensure that your clients plan how to pass on their digital assets to the intended beneficiary by using STEP’s Digital Assets Inventory. This provides an idea way for clients to collate a comprehensive list of all their digital assets.

2. Use legacy tools to access the digital assets of a loved one

The best way for to ensure that people have access to a loved one’s digital assets is to encourage your clients to put plans in place as part of their own estate planning.

Given that most service providers set out clear terms of use when setting up an account, it is understandable that they may prioritise their users’ privacy over the needs of a bereaved loved one. However, our report sets out the distress that can be caused when such access is denied.

The best way to avoid causing loved ones distress is for clients to make use of the legacy tools that the likes of Meta and Google already have in place. STEP’s #DigitalMemories campaign has details of these tools, which are free and do not take long to complete.

Emily Deane TEP, STEP’s Technical Counsel & Head of Government Affairs 2023