By Emma Baddaley, Strategic Relationship Director, Estatesearch.
Research from the Law Society has found that only a quarter (25%) of people have discussed digital assets with their practitioner in relation to a Will. However, with society’s trend to move online, everyone has a digital footprint these days and Digital Assets are becoming an increasingly important consideration.
More than just Cryptocurrency
According to Finder: 11% of Britons, or approximately 5.6 million people, have invested in cryptocurrency as of 2024. However, digital assets relate to far more than just Cryptocurrency and can include online accounts such as Bingo, gambling, shopping, National Lottery or PayPal accounts.
Anything that used to leave a paper trail is now electronic: letters are sent by email, photos are stored in the cloud, online market places have replaced a trip to the shops while investments have now become online dealing or a nip to the bookies is taken care of by an online gambling account. Cheques and cash have often been replaced by an App which are all much harder to track and trace.
A further challenge is that the definition of a Digital Asset is wide-ranging and can be described as: “anything that someone owns that exists in a digital format.” Such assets can be sentimental such as photographs in a Facebook account or documents stored on a cloud drive. However, on the financial side, assets with monetary value such as online marketplaces and gambling accounts could potentially also unearth liabilities and debt as well as assets.
For any Will writer drawing up a Will it is now worth discussing digital assets with clients. In addition, when drafting a Lasting Power of Attorney (LPA), once the LPA has been registered by the OPG, an asset search, including a digital asset search, is essential to establish all the assets and liabilities within an estate to ensure Attorneys can act properly on behalf of vulnerable donors.
Estatesearch is a legal technology company often working on bereavement and loss of mental capacity cases, and is one of the founders of the Vulnerable Banking Group. Estatesearch provides a Financial Profile Search which can be ordered under the authority of an LPA in order to establish all of the assets and liabilities of the donor.
Ensuring Due Diligence
Recently Estatesearch has introduced an additional Digital Asset Search designed primarily to search for profiles that are tied to monetary assets such as those held with cryptocurrency providers, gambling sites, credit agencies, or digital banks. These include leading Cryptocurrency exchanges, online gambling providers and money transfer platforms and online marketplaces such as PayPal and Etsy. Estatesearch undertakes enquires to ensure due diligence obligations have been met, enabling practitioners to demonstrate that they have done everything possible to identity the full extent of the estate for their clients.
Where a Will writer has been appointed as a Professional Deputy they should adhere to 4e and 4f of The OPG Deputy Standards: Guidance for Professional Deputies, which sets out best practice in relation to the donor’s finances; that they must make sure all debts are paid on time, all assets and investments are identified, and also notify banks and financial institutions where an account is held. Deputies should also notify any additional providers of income such as private pension companies.
This means it is even more important to consider digital assets.
A digital asset and liability search as part of best practice helps demonstrate a professional Deputy has discharged their duty to search for all the assets in an estate. Updating client Terms and Conditions or Care Letters to reflect policy on Asset and Liability searching as professional Deputies also reflects good best practice.
Digital Assets are not a new phenomenon. However, they are something that will continue to build momentum and have an undeniable impact on Will writers as more people increase their digital footprint.
Will writers drafting Wills need to discuss digital assets with clients. When drafting LPAs or those appointed as Attorneys or Professional Deputies, Will writers can only act in the best interests of clients if the full extent of an estate has been established and so a digital asset search is advised. Estatesearch’s Digital Asset search, which is available alongside the award-winning Financial Profile Service, now offers an effective way to identify financial digital assets and liabilities to ensure the appointed person can act in the best interests of the donor and due diligence is ensured.
Find more about our Digital Asset Search here.