Richard Dundee, Partner in the Private Wealth department at Wright Hassall, explains how the Property (Digital Assets etc) Bill could affect cryptocurrency and estate planning.

What is the Property (Digital Assets etc) Bill?

The rapidly evolving landscape of technology has transformed the concept of property, introducing new categories of assets such as cryptocurrencies (‘crypto’), Non-Fungible Tokens (‘NFTs’), and other digital assets.

The Property (Digital Assets etc) Bill, which had its 2^nd reading in the House of Lords in November 2024, aims to address these advancements by formally recognising digital assets as property under English and Welsh law.

This landmark legislation carries implications for succession planning, emphasising the importance of updating wills and educating executors on their role in administering an estate. Should the Bill be implemented, digital assets would be considered personal property, such as:

• digital files
• digital records
• email accounts
• domain names
• in-game digital assets
• digital carbon credits
• cryptocurrency holdings

Consequently, these assets can be explicitly included in wills, ensuring they are distributed according to the testator's wishes.

Should testators include digital assets in their will?

Omitting digital assets from a will could lead to confusion, ambiguity and disputes among beneficiaries. By updating a will to account for these assets, individuals can provide clear instructions on ownership and transfer, minimising potential conflicts.

As the popularity of digital assets grows, a person's portfolio may increasingly comprise non-physical holdings. Therefore, it’s also important to regularly update a will to ensure that these assets are not overlooked when estate planning.

What are the challenges with digital assets for executors?

Executors play a vital role in the administration of estates, but the inclusion of digital assets presents unique challenges:

Identification and valuation

Executors must locate and assess the value of digital assets, which can often be complex and fluctuate in value dramatically. Unlike traditional assets, digital holdings may require knowledge of access credentials, such as personal ‘keys’, and platforms, such as Kraken, Crypto.com, Binance and Uniswap.

Legal and Security Considerations

Digital assets may be governed by terms of service agreements, which can limit their transferability. Executors must also handle these assets securely to protect against fraud or hacking.

Technical Knowledge

Understanding the nature of digital assets, such as blockchain technology for cryptocurrencies, is essential if the executors wish to administer an estate effectively. Executors must stay informed about emerging trends and their legal obligations relating to these holdings. 

Summary

To address the challenges introduced by the Property (Digital Assets etc) Bill, testators, executors and estate planning professionals must be proactive.

Testators

• Inventory digital assets: Maintain a detailed list of all digital assets, including account credentials, wallets, and backup information.
• Include specific instructions: Clearly outline how these assets should be distributed and accessed. Consider appointing executors or trustees with technical expertise if necessary.
• Update your will: Digital asset portfolios can evolve rapidly. Regularly revisiting and updating wills ensures that these changes are reflected, preventing assets from being inadvertently excluded.

Executors

• Training and resources: Executors should seek training on digital asset management, including navigating platforms and understanding blockchain technology.
• Consult professionals: Collaborating with legal and financial advisors who specialise in digital assets can ensure compliance with laws and best practices.

About the author

Richard Dundee is a Partner in the Private Wealth department at Wright Hassall and specialises in non-contentious Trust and Estate Administration matters.

See also

Place a deceased estates notice

The storage and retention of original wills: key considerations

The duties of an executor: what to do when someone dies

Find out more

Property (Digital Assets etc) Bill (Parliament)

Property (Digital Assets Etc.) Bill: factsheet (GOV.UK)

Images

Getty Images

Publication date

27 January 2025

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.