Administering an estate according to the terms of a Will (or according to the intestacy rules if there is no Will) can be a complicated and longwinded task, especially for more complex estates.
Modern estates often pose even more difficulties for executors than they did in the past. This is because almost everyone now owns digital assets. ‘Digital assets’ is a collective term for belongings that are virtual rather than physical. This can include computer documents and digital photos as well as emails, social media accounts, cryptocurrencies and domain names.
An executor’s responsibilities
When someone agrees to administer an estate, they are accepting a responsibility not only to the person who has died, but also in the eyes of the law. The Administration of Estates Act 1925 states that an executor (or appointed administrator in situations where there is no Will) is under legal obligation to assess, value and administer everything belonging to an estate.
In practice, this also means that the executor is responsible for taking care of all the assets belonging to the estate during the process.
There is more information on an executor’s responsibilities in our free ebook What to Do When Someone Dies.
How does this apply to digital assets?
Most people amass a great many digital assets over time. Some of these assets will be worth a significant amount of money, some will not be worth anything at all. Regardless of their worth, all the digital assets belonging to a person are legally part of their estate.
By law, an executor is equally responsible for dealing with assets and belongings that are worth nothing as they are for valuable ones. If an executor does not deal with any assets, it’s possible for the beneficiaries of the estate to make a legal complaint about them.
Just like any other part of an estate, an executor will need to fulfil their legal responsibility to assess, value and distribute digital assets according to the terms of the Will (or intestacy rules).
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Assessing digital assets
This can be a very complicated step, as it’s not always straightforward to see what digital assets a person has.
An executor will need to carefully examine the contents of any devices that belonged to the person who has died, including smartphones, tablets and computers. They will also need to find out if the person who has died used any cloud storage facilities, such as Dropbox or SharePoint. Some digital assets will not be stored directly on the person’s devices or in cloud storage facilities. Rather, assets such as content, cryptocurrency or reward points might be stored in individual website accounts.
The process of assessing an individual’s digital assets is often complicated by executors not being able to access online accounts. Different websites have different policies on whether executors and other personal representatives can access accounts after the death of the owner. The executor will need to take their time over this step and may need to call in specialist support and legal advice.
This stage of the process can be made significantly easier if the person who has died has left instructions about their digital assets, perhaps in a digital asset log.
Valuing digital assets
Just like physical assets, some digital assets will be easy to value, while others will require professional advice.
Things like Paypal accounts, loyalty points and cryptocurrencies will usually have a clear value. Other things, like Facebook accounts, emails and digital photos will have only sentimental value. A third category of things, such as domain names, business websites, unpublished documents, successful gaming accounts and popular social media accounts could well be highly valuable and often need to be professionally appraised.
It’s important for executors to seek professional advice at this stage if they’re at all unsure, as it’s very easy to overlook the value of digital assets.
Distributing digital assets
When it comes to more traditional assets, there are clear paths for executors to follow. Anything of value is passed to the appropriate beneficiary, sentimental items are shared amongst loved ones and whatever’s left is often donated to charity shops or taken away by house clearance companies.
Digital assets need to be managed and distributed in a slightly different way. Anything particularly valuable will usually be sold or cashed out by the executors in order to distribute the proceeds among beneficiaries. Sentimental items can be printed or saved to memory sticks and shared out.
However, once these tasks have been done there is typically a large digital footprint remaining for the executor to deal with. Online accounts with organisations including retailers, dating sites, blogs, social media and email providers will all typically need to be addressed. The executor may choose to memorialise some of these, but most will simply need to be taken down.
As touched on earlier, each organisation will have a different policy on how accounts are dealt with when the account holder has died. Some will close down accounts if they have been provided with proof of death, others will want to see a Grant of Representation. In some cases, executors may require support from a specialist probate solicitor to access and/or shut down accounts.
Getting support with administering digital assets
Administering an estate can feel overwhelming, especially when there is a great deal to manage. Some executors have the knowledge, experience and capacity to handle it all themselves, others decide to bring in reinforcements.
A specialist probate solicitor can support you through the whole process of administering an estate, including the task of assessing, valuing and distributing digital assets.
How Roche Legal can help
We are reassuring experts who can help you with a wide range of legal matters. Please get in touch if you need legal support with:
- Trusts and Estate Planning
- Probate and Estate Administration
- Contested Probate and Will Disputes
- Powers of Attorney
- Court of Protection matters
- Presumption of Death Applications
- Missing Persons Guardianship Applications
Need further help?
If you would like to discuss how you can manage your digital assets for the future, please contact us.