Managing digital assets as an Executor

What you need to know about the digital assets of an estate

It was difficult enough for executors to locate assets when they were in desk drawers, safes, and safety deposit boxes, but the advent of technology significantly amplifies the challenge. The introduction of usernames, passwords, cloud storage, on-line photo albums, social media, on-line bank and investment accounts, personal websites, all further complicate matters and make the Executor’s job a lot harder and more time consuming. Digital property has the potential to be among the most challenging issues facing executors, who, struggling for information in this opaque area, may turn to executor advisors for guidance and assistance.

What is Digital Property?

Digital Property has been defined as “the accumulation of digital or virtual assets that comprise the body of virtual wealth”, but there are numerous components executors and testators should consider when contemplating the winding up of their affairs on death. Digital assets have many layers, beginning with the hardware, such as personal computers, iPads, flash drives, and smartphones. It’s estimated that there are now about 7 billion smartphones worldwide.  

Next is the software used to access accounts. There are the all-important security elements, including usernames, passwords, biometrics or biological identification, and the legislative issues regarding Terms of Service Agreements (TOSA). There are actual assets in online investment and bank accounts and virtual assets such as cryptocurrency in digital wallets.  

Digital assets are a far broader subject matter than most people realize, and there is a considerable range of issues yet to be addressed, with the potential to absolutely rock the world of estate planning and settlement. Think of it as #DigitalEstate.  

Consider for example, the legal question of whether the use of someone else’s passwords to access bank accounts is any different than stealing their credit card to charge purchases.

Impersonating another person is fraud regardless of whether they are alive or not.  

And what is an executor to do if they want to access an account that requires a thumbprint? Adherence to TOSAs will be absolutely fundamental.

Understanding these components, levels, issues, and challenges may help. CEAs should research the laws in their own region as they can vary from country to country and even within countries. Digital property can be broken down into accounts, data, contractual rights, and intellectual property.