As more of our financial, personal and social lives move online, digital assets have become an increasingly important part of estate administration. When someone dies, executors in the UK must now deal not only with physical possessions and traditional bank accounts but also online accounts, digital wallets, cloud storage and social-media profiles. Understanding how to handle these digital assets in probate is essential to ensure the estate is administered lawfully and in accordance with your loved one’s wishes.

Digital assets are broadly defined as anything of value or significance that exists electronically. This includes obvious items such as online banking and investment accounts, PayPal balances and cryptocurrency holdings, but it also extends to cloud-stored photos, email accounts, loyalty points, personal websites and digital business assets. Many people also have substantial online identities across platforms like Facebook, Instagram and X, which may need to be closed, memorialised or managed after death.

Considerations for Executors

In the UK, digital assets that hold value form part of the estate and must be included in the probate process. Executors must handle these assets carefully, particularly because online service providers have strict privacy rules and terms of service. Most providers will only engage once they receive evidence such as a death certificate, the Will and, where required, a Grant of Probate.

Identifying Digital Assets

The first challenge is simply locating the deceased’s digital presence. Executors may need to review devices, emails and paperwork to determine what online accounts exist. Family members can often provide valuable information about services used by the deceased.

Key places to check include:

• Email accounts for subscription alerts and statements
• Password managers or securely stored account lists
• Mobile phones, laptops and tablets
• Cryptocurrency wallets or hardware devices

Valuing and Securing Digital Assets

Once the digital estate is identified, executors must determine which assets have financial value and need to be reported for probate. Cryptocurrency requires special attention: access depends on private keys or seed phrases, and without them the asset may be lost permanently. The value of cryptocurrency must be recorded at the date of death for inheritance tax purposes. Online business assets, domain names and digital wallet balances may also need professional valuation.

Executors should take steps to secure accounts and prevent data loss. This may include contacting service providers, safeguarding devices and ensuring that valuable files or sentimental photos are preserved.

Distributing or Closing Accounts

After valuation, digital assets can be transferred or closed in line with the Will or intestacy rules. Financial assets may be cashed out or moved, while personal items such as photos, videos and documents can be shared with beneficiaries. Social-media accounts are usually either memorialised or deleted depending on family preference and platform policies.

Planning Ahead

Digital estate planning can make the probate process significantly smoother. Individuals should consider keeping an updated list of online accounts in a secure location and using tools such as Apple Digital Legacy, Google’s Inactive Account Manager or Facebook’s Legacy Contact. Clear instructions can help prevent the loss of valuable or sentimental items.

Handling digital assets in probate is now a standard part of UK estate administration. With careful planning and consideration, families can ensure both financial and personal digital property are managed properly and respectfully.

If you are an executor and would like to discuss how Lawson West can help, please give our friendly team a call on 0116 212 1000 or 01858 445 480 or complete our Contact Us form.

Created by AI and checked by a qualified solicitor

Passing wealth to family is a goal many people share, yet the process is often clouded by misconception. Some believe that setting up a trust automatically saves tax, while others assume gifting is always simple and tax free. Both gifting and trusts can be effective tools in passing on wealth – the right choice depends on your priorities and circumstances. 

Outright Gifting

If your aim is to reduce the size of your estate and you are comfortable with the thought of relinquishing control, an outright gift is often the most straightforward option. However, it is worth considering whether reducing the value of your estate is necessary at all; it may already fall below the inheritance tax threshold once allowances are applied.

• How it works: Imagine a parent gives their child £50,000 towards a house deposit. If they survive seven years from making the gift, it will no longer be considered part of their estate for inheritance tax purposes. If, however, they die within seven years, then the gift may be subject to inheritance tax.
• Exemptions: Smaller gifts can be made tax free. For example, you can gift up to £3,000 per year or give £250 per person annually. Over time, these exemptions can add up.
• Things to watch: Gifting assets such as property or shares may trigger capital gains tax at the point of transfer. Once gifted, the asset is no longer yours – the recipient has full control to use, sell or transfer it. You need to consider whether you are comfortable with the thought of relinquishing control of the asset.
• Common mistake: If you continue to benefit from a gifted asset (such as living rent free in a house you have given away) then HMRC will still treat the asset as part of your estate for inheritance tax purposes.

Trusts

Trusts are more structured and can be valuable if you want to support family members while retaining some safeguards.

• Definition: A trust is a legal arrangement where trustees hold and manage assets for the benefit of chosen beneficiaries. Different types of trust exist and choosing the right one depends on your circumstances and your overall objectives.
• Control: You provide guidance on how and when assets are accessed – for example,  releasing funds only when a beneficiary reaches a certain age or taking into account a beneficiaries’ circumstances at the time of releasing the assets.
• Protection: Trusts can help shield assets from risks like divorce, bankruptcy or poor financial decisions by beneficiaries.
• Complexity: Trusts require ongoing management which includes reporting obligations and navigating tax rules. There are also very strict duties that your Trustees will be bound by.
• Tax: Assets in trust are not automatically exempt from inheritance tax. Transfers into most trusts are treated as chargeable lifetime transfers and may attract an immediate tax charge if available thresholds are exceeded. Trusts may also face ten‑year charges, exit charges and income / capital gains tax charges. You need to consider the extent of any tax liability that may arise and how this would be settled.  
• Common mistake: Retaining a benefit (such as income or capital) from a trust you have set up will result in HMRC treating the assets as though they still belong to you and may have other tax considerations.
• Uses: Trusts are typically suited to larger sums or situations where retaining control is essential. Consider whether retaining control is truly necessary, or if it simply adds unnecessary complexity.

A Hybrid Approach

Many families find that a combination of gifting and trusts works best — gifting smaller amounts directly while placing larger sums or property into trust.

Final Thoughts

Passing on wealth can be achieved through outright gifts, trusts or a combination of both. The right choice depends on your circumstances, your desired level of control and the tax implications. Professional advice can help you identify the most effective approach for your circumstances.

If you would benefit from guidance on whether gifting, trusts or a combination of both is right for you, please give our friendly team a call on 0116 212 1000 or 01858 445 480 or complete our Contact Us form.