Estate planning for digital assets: navigating legal challenges in the UK

The digital revolution has transformed how we live, how we invest and how we store sentimental items. Our financial assets and personal media, such as photos and videos, now mostly exist in digital form.

As more of our finances and memories are stored digitally, it’s increasingly important to understand how these assets can be accessed after someone dies.

What are digital assets?

Digital assets comprise of a wide range of online or electronically stored content, which fall broadly into two categories:

1. Financial assets: cryptocurrencies like Bitcoin and Ethereum, NFTs, online-only bank accounts, PayPal balances and certain shares held via trading apps like eToro or Revolut
2. Non-financial assets: cloud photo libraries, emails, social media accounts, blogs, domain names, online gaming accounts and subscription services.

While financial assets tend to attract attention for their monetary worth, clients often express greater concern over the emotional value of their non-financial assets. The fear of losing meaningful memories cannot be ignored.

Despite the growing prevalence of digital assets, there is currently no comprehensive statutory framework governing the succession of digital assets in the UK. Executors face a patchwork of platform-specific terms and service agreements, privacy laws and uncertain property rights when trying to manage such assets.

Email and social media accounts are not “owned” in the conventional sense. They are licensed to a user and most platforms retain the right to terminate accounts on death. This can create a major barrier for executors trying to access or preserve such accounts and their content.

Cryptocurrencies and inheritance tax

Cryptocurrencies are decentralised, unregulated and often anonymous. Access to cryptocurrencies is via a holder’s private key. If a deceased has failed to share their private key, seed phrases or access credentials, such potentially high value assets may be irretrievably lost. Unlike a bank account, no central authority can be petitioned for access.

Inadequate planning for the management of digital assets can come with significant consequences. Beyond the potential loss of value to your estate, there’s the added issue that HMRC treats cryptocurrencies as an asset within an estate, meaning they are subject to inheritance tax (IHT) based on their value.

This could lead to an IHT liability arising in an estate on the value of assets that cannot be accessed. In addition, given the fluctuating value of cryptocurrency, it’s essential to exercise caution when dealing with and disposing of such assets to avoid unforeseen, or otherwise potentially manageable, tax liabilities arising, such as capital gains tax.

What happens to your social and digital media when you die?

Facebook provides the option to designate a legacy contact – a trusted person who can manage parts of the account after the user’s death. Once Facebook is formally notified and provided with proof, such as a death certificate, the account can be memorialised. The legacy contact may then update the profile, respond to friend requests, pin tributes and even download portions of the data, such as photos and posts, if permission was granted beforehand. However, they cannot access private messages or log in as the deceased. If no legacy contact is named, immediate family can request that the account be memorialised or removed, but access to content remains tightly restricted.

Instagram, also under Meta, offers a similar memorialisation option but doesn’t currently allow for a legacy contact to download content or directly manage the account. Upon receipt of a valid death certificate, Instagram transforms the profile into a memorialised account, preserving existing photos and posts but freezing the account against further changes. Family members can request removal of the account, but access to the stored content is not released unless the deceased had taken specific steps to allow this before their passing.

Other platforms, such as Twitter (now X), TikTok and Snapchat, tend to have even stricter policies. They may allow for account deletion upon proof of death but generally deny requests for access to any user data, including photos and messages. This is largely due to privacy considerations and the global patchwork of data protection laws, which privilege the user’s privacy even after death.

Cloud storage services like Google Drive, Microsoft Office 365 and Apple’s iCloud each introduce their own complexities when managing a digital legacy. When a user passes away, executors and family members may request data access through formal channels, but these requests are typically subject to stringent verification processes and may still be denied if not authorised prior to the owner’s death.

In the case of iCloud, Apple maintains particularly strict privacy protocols. Even with proof of death and legal documents such as a death certificate and grant of probate, Apple will generally not unlock the account or provide access to its content unless the user had set up a Legacy Contact through Apple’s Digital Legacy program. If this option was not enabled, surviving family members may face protracted legal hurdles and, in many cases, be unable to recover important photos, documents or notes.

Furthermore, as with other cloud services, if the account lapses due to non-renewal or missed payments, there is a risk that stored files will be permanently deleted after a certain grace period (typically 30 to 90 days but varies by service.)

This presents a unique form of risk; even when accounts are properly documented and legal authority is established, the simple passage of time or ignorance of necessary payment renewals can lead to the irrevocable loss of valuable records and memories, particularly on platforms like iCloud that are so deeply entwined with users’ digital lives.

Managing your digital legacy

I would strongly advise everyone who holds digital assets to complete their own legacy guide to support their executors with:

1. Locating assets: how far does your digital footprint extend?
2. Accessing accounts: are your legacy contacts up to date? Even with a grant of probate, most platforms will refuse access to anyone not previously authorised, citing privacy laws
3. Valuation: understanding the extent of the assets held is crucial to obtain a valuation
4. Jurisdictional issues: many platforms are headquartered abroad, including Meta, Google and Binance. This can complicate legal access and may invoke foreign succession laws or procedures if all appropriate planning measures haven’t been taken.