STEP has recently launched the findings of its most recent report, looking into digital assets. These are as follows:
1. Digital assets have become a common part of estate administration and modern estate planning. Over 90% of the practitioners surveyed (from a total of 507 respondents) expected that demand for advice on digital assets will increase in the future.
2. Clients look for digital asset advice in relation to estate planning and also administration. Email accounts and social media accounts are currently the most-asked-about assets.
3. Difficulties accessing digital assets are frequently experienced by clients following a death or as a result of the incapacity of a family member – this understandably causes both distress and frustration.
4. Third-party service providers can present practical, procedural and legal obstacles to both estate planning and administration.
5. There’s a wide variation in practices, policies and tools for dealing with digital assets. As a result, practitioners need to be educated on best practice.
6. Law reform is required in order to enable effective estate planning and administration for digital assets.
Other interesting findings:
• One-fifth of the responding estate practitioners deal with digital assets on at least a monthly basis.
• Conversations about data protection and privacy are common during estate planning, as well as requests to close accounts/ prevent heirs from accessing digital assets. From the respondents who received questions from clients about digital assets, the findings indicated 29% had clients who wanted digital assets to be transferred to heirs following their death, vs 12% who wanted their account to be closed or to prevent heirs from accessing their digital assets.
• A growing area of client concern is likely to be around tax treatment of cryptocurrencies.
• There is an inability to access online services, for example email accounts, which can make it difficult to obtain relevant information about the rest of the estate, for example the identification of online bank accounts.
• Over 85% of the respondents surveyed agreed cloud providers should provide better solutions for managing access to digital assets stored in the cloud after death or following incapacity.
• Most estate practitioners (72%) would advise clients to express their preferences regarding digital assets in a written document.
• 32% of estate practitioners either didn’t know whether digital assets qualified as property in their jurisdiction or stated the law was unclear.