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Digital Assets and Estate Planning: What Scots Should Know

Digital Assets and Estate Planning: What Scots Should Know

In today’s world, digital assets are a significant part of our lives. From social media accounts to cryptocurrency investments, these assets hold financial, sentimental, and practical value. Yet, many people in Scotland don’t account for them when planning their estate.

This article explores the nature of digital assets, why they matter in estate planning, and practical steps Scots can take to ensure their digital legacy is protected.

What Are Digital Assets?

Digital assets include anything you own or control in electronic form. Examples include:

  • Financial assets: Cryptocurrency (e.g., Bitcoin, Ethereum), PayPal balances, and online investment accounts.
  • Personal accounts: Social media profiles, email accounts, and photo libraries on platforms like Instagram or iCloud.
  • Online subscriptions: Streaming services like Netflix or Spotify.
  • Business assets: Domain names, websites, and online stores.
  • AI-generated content: Work created using tools like ChatGPT, which might hold intellectual property value.
  • Metadata: Information embedded in digital photos or files, which could be vital for identifying or valuing these assets.

Why Digital Assets Matter in Estate Planning

Ignoring digital assets can lead to significant challenges:

  • Loss of value: Cryptocurrency wallets or online earnings may be inaccessible without clear instructions or access credentials.
  • Emotional hardship: Families may lose irreplaceable digital memories like photos or personal emails.
  • Legal barriers: Many service providers restrict access to accounts under their terms of service.

An Example:
A Scottish family recently faced difficulty accessing their late father’s Bitcoin wallet. Without knowing the private key, the funds were unrecoverable, despite the family knowing the account existed. This emphasised the importance of secure but accessible documentation for digital assets.

Emerging Challenges with Digital Assets

New technologies bring unique considerations for estate planning:

  • AI-generated content: If you’ve created digital art or written materials with AI, who owns the rights after your death?
  • Metadata in digital files: This often contains valuable information (e.g., timestamps, location data) but may require specific tools to access.

These issues highlight the evolving complexity of managing digital estates.

Digital Assets and Scottish Succession Law

In Scotland, digital assets can be included in your estate under the Succession (Scotland) Act 1964. However, the interaction with legal rights (the entitlement of children or a spouse to claim part of your moveable estate) can be complex. For example, cryptocurrency or digital art may be classified as moveable property, requiring careful valuation and inclusion in legal rights calculations.

Planning ahead ensures your intentions align with Scottish law while preventing disputes.

Practical Steps for Managing Digital Assets

To secure your digital legacy:

  1. Inventory your assets: Create a comprehensive list of your accounts, files, and online subscriptions.
  2. Use secure storage: Store login details and private keys in a password manager or secure document that your executor can access.
    • Recommended tools: LastPass, 1Password, or Dashlane.
  3. Update your Will: Clearly outline how your digital assets should be handled.
    • Example: You might designate a tech-savvy friend or relative to manage specific accounts.
  4. Check platform options: Some services, like Google’s “Inactive Account Manager,” let you assign a legacy contact to manage your account after death.

How a Solicitor Can Help

A solicitor experienced in estate planning can:

  • Ensure your Will reflects your digital wishes.
  • Advise on compliance with Scottish succession law.
  • Guide you in using digital estate tools securely.

An Example:
A client used a password manager to list all her digital accounts. She authorised her executor to access this information, streamlining the administration of her estate and preserving sentimental photos stored in the cloud.

Final Thoughts

Digital assets are often overlooked in estate planning, yet they’re increasingly important. By taking the right steps, you can protect these assets and save your loved ones unnecessary difficulty.

If you’re ready to address your digital estate, speak with a solicitor who understands both the legal and technical aspects of planning in Scotland.  Please contact our Private Client Team on 01324 622 888 or contact help@randa-fa.co.uk and we would be delighted to assist.

 

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