In today’s digital age, our financial information is no longer stored in physical filing cabinets but rather in the digital realm. Digital assets have become a crucial part of our estate planning, yet many people overlook them when preparing for the future.

What exactly constitutes a digital asset? According to Natalie Butler, a private client lawyer, digital assets are possessions accessed on a digital device through a third-party platform. This includes a wide range of assets such as cryptocurrency, online bank accounts, photos stored in the cloud, and even store points for retailers accessed through their websites or apps.

When it comes to estate planning, it’s essential to make your executors aware of your digital assets in advance. Creating a digital inventory detailing what you hold and where to find it can be a helpful tool. However, be cautious about sharing passwords, as it could potentially lead to legal issues under the Computer Misuse Act 1990.

Platforms like Apple allow you to appoint a legacy contact to access your data after your passing. It’s crucial to familiarize yourself with the terms and conditions of the platforms where you hold digital assets to ensure a smooth transition for your beneficiaries.

Consider storing your digital inventory securely, whether in a hard copy, encrypted program, or saved to a USB stick. For individuals with significant digital assets, appointing a digital executor to handle online businesses or personal brands can be beneficial.

The legal status of some digital assets, like cryptocurrencies, has been a gray area. However, legislation is underway to classify crypto tokens as personal property, providing clarity for estate planning purposes. Executors may need to seek professional advice when managing volatile assets like cryptocurrencies to safeguard the beneficiaries’ interests.

In conclusion, digital assets play a significant role in estate planning in today’s digital age. By taking proactive steps to document and secure your digital assets, you can ensure a smooth transition for your loved ones in the event of your passing. Stay informed about the legal status of digital assets and consider appointing a digital executor to manage complex digital estates effectively.