Paperless possessions pose a real problem for the executors of your estate. Clare Gorman explains why keeping records of all assets is so important…
I have online bank accounts that don’t generate statements or any form of paper trail. Will my executors find them?
It is not unusual to have bank accounts and investments these days that are held entirely online, that we access from our smart phones or tablets when we want to pay a bill, etc.
This is fine for everyday use, but they can cause an issue for executors if you pass away, as they are very difficult to locate and close down.
If money is sitting in a forgotten account, it may mean your beneficiaries inherit less than they are entitled to and your estate does not pay the correct amount of inheritance tax, leading to penalties and interest.
I recently invested in a cryptocurrency. What will happen to these assets if I die?
The rise of cryptocurrencies, such as Bitcoin, has created similar problems to online bank accounts.
Users are issued with a Bitcoin address and private key that allows them to transfer or sell their currency. If these details cannot be located after you die, problems can arise in finding and accessing the money.
A case last year highlighted this issue. The sudden death of the founder of Canadian cryptocurrency exchange. QuadrigaCX, left more than £100 million that couldn’t be accessed. Gerald Cotton is thought to be the only person who held the passwords for this large amount of cryptocurrency and they have never been traced. His death forced the company’s closure and has led to legal action that is still ongoing.
Whilst this is an extreme example, it does underline the importance of keeping a record of cryptocurrency keys and passwords and making your executors aware these assets exist.
I have digital photo and music accounts that are not worth much, but have sentimental value. Can my family access their contents if I pass away?
Some digital assets have monetary value, some are significant in terms of their intellectual property rights and as you quite rightly say, others have nothing more than sentimental value, but are very precious to your loved ones.
It is, therefore, useful to check each account provider’s terms and conditions to see how they should be dealt with if you pass away. It may also be helpful to appoint a separate executor in your will to manage digital assets, ideally, someone computer savvy.
How do I make sure there is a trace of my digital assets?
I would recommend keeping a record of all accounts and cryptocurrency somewhere your executors can find it when the time comes. And don’t forget to make sure it remains up to date.
If you are looking for a secure location to store such a list, we can keep with your will if you’d prefer not to leave it in the house.
To find out more about the tax implications of making gifts, why not book a free 30-minute consultation with one of our probate specialists? Call us on 0114 218 4000, email info@tayloremmet.co.uk or complete this form.
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