On February 7th, STEP released their 2024 publication “Decoding Digital Assets: An Overview for Practitioners”, as a spiritual successor to their 2021 release of “Digital Asserts: A Call to Action”.
Decoding Digital Assets is a comprehensive guide developed by STEP, focusing on the emerging importance of digital assets in the context of estate planning and administration. The publication covers a wide range of topics, from the basic understanding of digital assets like cryptocurrencies and NFTs to complex issues related to their management after the owner’s death or incapacity.
Broadly speaking, it provides key practical advice and recommendations, including:
- Educating on Digital Assets: Advisors should familiarise themselves with various digital assets, including passwords, devices, cryptocurrencies and NFTs, understanding both their financial and emotional value.
- Embracing Technology: Advisors are encouraged to leverage technology for estate planning and incorporate digital assets into wills, trusts, and estate plans.
- Developing Digital Fluency: Encouraging practitioners to enhance their digital skills to identify and manage digital assets effectively.
- Implementing Secure Custody Practices: Understanding the importance of secure custody solutions for digital assets.
- Promoting Awareness on Digital Legacy: Advisors are encouraged to discuss digital legacy issues with clients, ensuring they understand the implications of digital assets upon incapacity or death.
- Updating Estate Planning Documents: Ensuring wills and other estate planning documents explicitly include provisions for the management and distribution of digital assets.
The Impact Of Digital Assets On Estate Administration & Probate
The process of administering a person’s estate upon their passing begins with discovery, where you or your estate and probate team set out to assemble a list of assets and liabilities of the estate.
This is a time-consuming and costly exercise without the right tools. Your team endeavours to find records, invoices, receipts, contracts and communications that are mostly kept in a digital format – and to which they don’t have access.
Some asset classes that clients own exist entirely online, and more are moving digital every day.
For the average estate, your team will now be attempting to determine:
- Are there any overseas investments using online investing apps?
- Do they have online gambling accounts holding funds? eBay or Paypal accounts? Saving apps?
- Do they own any intellectual property? Where are these manuscripts, documents, photos, videos or records stored?
- Do they have online reward cards or store credits? Online subscriptions? Direct Debits? Unregistered Vehicles?
- Do they own domain names (www.example.com), websites, online businesses, social media accounts?
- Who is their stockbroker?
- Do they own cryptocurrency or NFT’s?
- Are there any accounts that require two-factor authentication? If so, do we have access to the authentication?
- What are the insurance policy numbers & documents? Bank account numbers?
When a client dies, they invariably own at least one Computer, Phone or Tablet. In fact, most clients will own multiple devices in a combination of the above. Encrypted on these devices is a significant repository of important information relevant to the management of their estate, plus (on average) ownership of over 300 online accounts. How does your firm or an executor access this information in a simple and straightforward manner?
Whilst a Will may provide for these Digital Assets, accessing these assets themselves provides a challenge for your teams without the appropriate tools. The nature of encryption in modern technology means that once the client has passed away, access to their device is in most cases, impossible. Access cannot be retroactively granted.
Thus, Digital Assets represent a compounding problem. Each client for whom access details are not organised today, is added to the tidal wave of administrative burden and financial losses experienced in the future by families and executors.
This isn’t a problem that can be solved later.
Unfortunately, there is no option to solve this problem at a later date. There is no way to retroactively obtain access to this information, and the impact will continue to grow each day as services move online.
How BePrepared Solves This Problem
BePrepared is a secure, virtual, “vault”. Like the physical vault you might have in your house, the BePrepared vault is a secure place for your clients to store their passwords, documents, financial information, subscriptions, asset records, accounts, contacts and all other “Digital Assets” – without disclosing any information to your firm. Only after their death, and a strict death verification process, is the data available to the firm to assist in the probate and administration process.
BePrepared will be skinned in your firms colours, logos, branding and a name that you choose. It is made available to your clients via your website, as well as being a stand-alone program that is downloaded onto their phone & computers.
Clients are able to view digital copies of their legal matters through the vault which also functions as a highly-secure client portal. Both your team and external advisors can be invited to securely upload data on their behalf. Further, clients can update their information at any time by simply opening the application.
Upon death, the estates team at your practice will have complete and total access to all of a client’s important data. In this way, BePrepared presents a full-scale solution to the issue of Digital Assets, and the future of Estate Planning.
Financial and Operational Benefits
The adoption of BePrepared presents significant time and cost savings for law firms, with estimated savings and additional revenue from reduced administrative tasks, client engagement, automated referrals and automated probate opportunities. The platform also enhances client stickiness and cross-selling opportunities for law firms by integrating seamlessly into their existing systems and offering a comprehensive solution for digital asset management.
This article was submitted to be published by BePrepared as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.
