In a recent survey PWC estimated that UK households have more than £25bn in digital assets.
Hardly surprising when you consider that over the past 15 years your office at home is likely to have changed significantly. You will almost certainly have a laptop and a mobile phone gracing your desk. You probably won’t have pages and pages of bank statements piled up waiting to be filed. In fact almost everything you do in the office will be online. You are creating a huge amount of digital assets but does anyone else know about these assets if anything happened to you?
The term “Digital Assets” has emerged relatively recently and is still misunderstood by many. Simply put a digital asset is content owned by any individual that is stored in digital form. All your digital assets combined make up your Digital Estate.
Digital assets encompass everything from iTunes to online bank account. For most people in the U.K and, in fact around the globe, a proportion of their estate is digital. Think about all the accounts that are available from Facebook and Twitter to email accounts such as Gmail and Hotmail.
The largest digital assets might be your iTunes library for music, Amazon for digital books, email accounts, shop accounts like ASOS.com and PlayStore, and online bank accounts. Many people also have their own domain name – this also has a value.
What happens to digital assets?
Very few people make inventories of their digital property. Traditionally people would leave items of value such as furniture, cars and such like in a Will. It would rarely change and in most cases people didn’t update them. Now in this ever-changing digital age how do we know that all our assets are being accounted for and will go to the people we want them to?
But first we have to understand if we even own them. The law around ownership and therefore the ability to bequeath digital assets is grey at the moment. It’s simply a case of the digital world moving at a faster pace than the law.
The truth is that, many of the things we would think of as “digital assets” are in fact “digital licenses.” This means that the items purchased through a particular site are not actually owned by you. You have merely purchased a license to use the media. Typically, these sorts of arrangements allow you to use the content or services but they are not transferable i.e. you can’t pass on them on when you die. For example, your iTunes account; when you purchase music from iTunes you are simply buying a license to listen to that music – you don’t actually own it. It means that this particular digital asset will not make up part of your estate and you will not be able to bequeath it. However, the law is changing, and will eventually catch-up with the issue of digital assets – so at some point you may be able to bequeath it, so it’s worth listing now to safeguard it for the future.
So, look carefully at the terms and conditions before opening an account with any service provider, as it is the wording of these T&CS that determine whether or not you actually own the digital asset you are purchasing.
How to keep a Digital Inventory
The fact there are a number of tech start-ups entering the market looking to address these issues shows that a demand has already been created.
Lexikin, being one such company, has developed a platform that allows its customers to store securely all their important digital assets and memories so that they can leave them to whomever they wish should something happen.
Making a Living Will
We are a consumer driven society with an individual’s assets and possessions changing all the time. Technology is also changing and digital assets will become an ever more important part of an individual’s net worth in years to come. It therefore follows that without keeping a track on these they could potentially be lost in the cloud forever.
Any platform you consider using should have the ability to incorporate both digital and old world assets – effectively producing a living Will. A Living Will means that you can update your assets whenever you like and ensure that your asset register and Will are always current.
Even in a world full of paper bank statements, share certificates and Premium Bonds, huge amounts of money lie left unclaimed because they were not found by a person’s executor or mentioned in a Will. The Financial Times reported that a conservative estimate would be upwards of £77 billion. Imagine how much more difficult it will be to track assets when they are digital. The value could increase to £100s of billions. You want to be sure your assets aren’t among these missing billions.
Many solicitors subscribe to a service that does help track down some of these missing assets. It is available to anyone for a small charge www.uar.co.uk
In the paperless world, where almost all financial business is conducted online, the problem of record keeping will become even harder. Most bank statements are now paperless, very few companies actually issue share certificates anymore, and even the good old NS&I do a very good job at keeping everything online. Companies like Lexikin allow people to ensure that their financial affairs are left neat and tidy so that everything can be located easily.
It pays to be prepared, start considering about your digital assets now. Have a think about what you want to happen to them after you are gone. This means not only your bank account and pension but also your social media accounts, digital photos and anything else you own and store online. When you write your Will, or create a Living Will, you can request that your executor manages your wishes, however diverse and varied they may be, so that the whole of your estate is covered and not just the traditional parts.
About the Author
James Hickman is CEO, Lexikin – an innovative new online platform which creates a digital record of all your assets and wishes acting as a digital executor. It can be used for estate planning, creating and storing Wills and leaving a complete digital legacy for your family. It is a simple and secure way to make a digital record of your possessions ensuring they are better understood and dealt with. https://www.lexikin.com/