Financial planning

Managing your digital estate

Shona Lowe

If you read our blog regularly, you’ll know how keen we are that our clients have a professionally drafted Will in place. After all, it can help manage the inheritance tax burden, and make sure as much of your money as possible goes where you want it to. But have you thought of making provision for your digital estate?

Only 10 years or so ago, this question would have seemed both silly and baffling.  What do you mean, my digital estate?   But in the last decade or so, social media and online activity has moved from being a mysterious thing that youngsters did, to being a mainstream part of our lives.

All generations are now ‘socially active’; social networking use among internet users ages 50 and older has nearly doubled—from 22% to 42% over the past year, and we routinely share family news, photos and videos through these channels.

But it’s not just social media, almost every aspect of our lives can now be found online.  Our family snaps, holiday photos, charity donations, tax returns, certificates, TV licences, receipts, shopping, music, e-books, poll-votes, complaints, and love letters are all there too – the list is almost endless.

Where is it all?

The most well-known examples of online life are the big names from Silicon Valley – Google, Facebook, Twitter, YouTube, Pinterest – but there are dozens more, and most bricks-and-mortar businesses now have a major online presence too.

For example, companies like Kodak and Fuji might no longer supply us with spools of camera film but each now has a major image storage function in its place – and many people store their photos and videos there.  (This kind of thing is often described as “the cloud” – which really just means your digital assets are stored on a big central computer somewhere, and can be accessed on any device from anywhere in the world, rather than just from your own laptop or PC.)

The future fate of your digital estate

Whilst the legal principles of inheritance apply in a similar way to both tangible and online assets, the administration of a digital estate can be much more complicated – and this is often because of rights of access and permission to transfer, edit or close digital possessions.

Anyone with a key can go through the loft or the garage, but there is no automatic right of access to digital inventory.  Banks and financial institutions are used to dealing with this and most have helpful information online for executors.  However, none of the major social media networks, like Facebook, will hand over control to anyone else without express permission or verification of their authority.

This is where your Will can come in. It can give your executors the power to access, handle, distribute and dispose of all your digital assets.  Being clear on what you want to happen (if there’s a choice) will help your executors carry out your wishes in the way that you intended.

What is it worth?

You can generally divide your digital assets into two key areas – those which have financial worth, and those which have sentimental value.

Assets with monetary value might include things like digital subscriptions and rights, as well as evidence that might be valuable in the future, such as purchase receipts and guarantees. Those with sentimental value might be things like photos, videos and emails.

There are many more examples of each kind of asset, so it’s a good idea to have a thorough trawl through all your bookmarks or favourites, to remind yourself where you frequently log in or manage things online.

Once you’ve done that, it’s often worth spending a bit of time writing down what you’d like to happen to these assets. To get started, you can download our assets log template.

What about my password?

I know – we’re always, always going on about never writing down or sharing your passwords and PINs – and that’s still sound advice.  But someone sometime is going to need access to your online accounts after your death, so you need to find a safe, secure – yet findable – home for your log-in information.

There are numerous online offerings; if you search for “digital password solutions” you should be able to find one to suit your pocket whilst providing the reassurance you want.  When you’re thinking about this, don’t forget to include things like passwords to devices, like a tablet, as well as passwords to websites and apps.

Looking (even further) ahead

We can be sure that technology will continue to advance at pace, so it’s a great idea to chat about it all to your financial planner from time to time –particularly if you take up some new digital habit.

It’s the same as planning for passing on your other assets: think clearly about what you’d like to happen, create and maintain your assets log, and let a professional adviser help you describe your wishes in the clearest possible way.    Then once that’s done, you can simply relax, and summon your driverless car for a pleasant outing, secure in the knowledge that your final wishes are all in hand.

If you have any questions or concerns about your legacy, or any other financial matter, don’t hesitate to get in touch with your 1825 Financial Planner.

Or for help with estate planning (digital or otherwise) you can contact 1825 Private Client Services directly:

*Call charges will vary. We’re open Monday-Friday 9am-5pm. Please also note never to send personal information via email, as it is not a secure method of communication.

This blog should not be regarded as financial advice. The information here is based on our understanding in March 2018.