Have you made a plan for what will happen to your digital assets when you die? Are they included in your estate planning?
No matter how modest your assets you need to make a Will and when it comes to digital assets you probably have more than you think.
When you go online you’re creating a digital footprint and part of this is your digital assets. Obvious thoughts go to online banking and investment accounts, particularly those associated with cryptocurrencies. However digital assets go much broader than that. While English law has no definition of digital assets, They include email accounts, social media profiles and posts, websites, blogs, e-books and courses, streaming accounts and cloud storage.
So while posting a photo of the cake you made to Facebook might not seem very unusual or exciting you are creating a digital asset. The difference as regards to estate planning is how these assets are treated in your Will compared to their more traditional counterparts. All of this has implications for your family executors and those instructed to handle probate.
In estate planning and probate this has become more of an issue, The world has become an increasingly digital place in the past few decades. Technology that once seemed positively space age has now become something perfectly normal and every day. Signing up for a new online account, along with the required user agreement, to make a purchase, share content or manage your daily life is no longer novel. Worldwide 59.5% of the population use the internet. That’s around 4.66 billion people. 4.15 billion of us are active social media users.
No new technology is without issues and the same is true of digital assets. While passing physical possessions to a loved one is relatively straightforward it’s not the same in the online world. Think about the difference between inheriting your partner’s DVD collection and not being able to access what you see as the family Netflix account because you don’t know the password. The issues fall into the areas of ownership, privacy, access and value.
The Law Commission are well aware of the issues around digital assets in relation to English law . Work is in progress examining the difficulties presented by crypto and digital assets with a view to reforming current legislation to accommodate ‘intangible’ assets. Recommendations are due in 2022 and will then need to be implemented.
Furthermore, accommodation in English law would only be a starting point. Digital assets are a multi-jurisdiction issue. For example, the platform may be owned by a company registered in one country with servers and data in another while the actual user resides in a third location. Each location is subject to the laws of its own country. Additionally, local laws may apply as they do in individual states in the USA.
Ownership of digital assets works differently to ownership of physical items. While in the past we would have had letters, record collections, bank statements and photo albums we now have cloud storage for photos, emails, online banking apps and music streaming services. So can you leave these to loved ones in your Will in the same way you would the physical versions?
One of the key questions is whether you are licensing or own the content? Are the permissions you have for use of the digital platform about simply about access? Of course, this will vary depending on the type of asset. You’d expect to inherit the contents of a bank account rather than the actual account itself. But what about if the bequest in question is an e-book? In that case, it depends on what the terms and conditions of the user agreement say. Often you are paying to access content. Your purchase is the right to use rather than ownership.
But what about content that you have uploaded rather than downloaded? The content you created. Under English law, the copyright of emails and photographs belongs to the creator. So the last photo you took or email you wrote belongs to you. This ownership is transferable. What might be more problematic is access.
When you signed up for a social media platform, cloud storage or an email account you will have agreed to certain terms and conditions of use in the form of a contract or user agreement. Depending on what these say will dictate who owns the content you created on the platform and whether you are able to transfer that ownership to another individual.
When it comes to online activities privacy is something we value. We expect that our data will be kept secure and only be accessed by people with the correct permissions. That our accounts will require use of the correct passwords and access codes. Unlike with physical objects in order to distribute these assets as outlined in your Will the Executor will need to engage with the systems they are held on.
For many accounts, closure or deletion is the best approach. This prevents the upset that can be caused by the platform ‘helpfully’ sending reminders about a user. It also means that the account cannot be used for fraudulent purposes. Left open online shopping accounts from eBay to Amazon to supermarkets run the risk of being taken advantage of. This is a particular concern where payment information, such as card details, are stored on the user profile.
You may also want personal content to be destroyed after your death. Akin to not wanting love letters to be seen by your children, you may have emails or photographs of a personal nature that you would like to be virtually destroyed.
The challenge the Executor will face is ensuring that they access assets and arrange account closures in a manner that is legal and does not contravene the Computer Misuse Act 1990. In some cases, sharing of passwords might help and this is an area that will require advance consideration and depend very much on the type of account and the situation. Is the account in question actually shared such as bank account in more than one name? Or it just thought of as a shared account? For example, a Netflix or Amazon Prime account used by the entire family and paid for by that joint account but actually in the name of a single individual.
In circumstances where conditions such as dementia are present then sharing of passwords and permitting access may be part of planning for care and form part of Lasting Power of Attorney.
Finding out how to close an account is often not straightforward. The companies want you to remain a customer or service user. Making contact may not be easy either. Executors may find making representations about access to content challenging. Additionally data protection is taken very seriously making service providers understandably reluctant to release or provide access to anyone who is not the account holder. It’s understandable but still frustrating for the relatives of the deceased.
Approaches vary among platforms. Twitter will delete an account when authorised by the Executor or an immediate family member. Facebook has introduced an option to choose in advance what you want to happen to your account and allow for appointment of a ‘legacy contact’. Google has an inactive account manager tool. https://support.google.com/accounts/answer/3036546?hl=en
As part of the granting of probate your estate needs to be valued and this includes digital assets. This is necessary in order to assess for inheritance tax and agree to the final distribution of the estate. Some assets will have a clear financial value such as online bank and investment accounts as well as crypto assets. Others assets such as family photographs will be of sentimental rather than monetary value.
Digital assets such as social media profiles, websites, blogs, e-courses, photographs, videos and online content may have value depending on who they belong to and how they have been used.
A small business may utilise social media, a website with a blog, an online shop and a YouTube channel in order to market and sell their products or services. In such case these could be seen to be part of the assets of the business and part of the value to be sold or transferred on the owners death. However, an inability to access and update these is likely to impact upon the business reducing its viability and value. Business owners should ensure that continuity plans for access are well established and that they are not the only person with access codes and permissions.
Jobs and careers have sprung up in the online world that simply didn’t exist a few decades ago. Online influencers, bloggers and vloggers as well as gamers make a living based on digital assets. The value of their profiles and accounts lies in their followers numbers with income made from affiliate links and sponsorship. The question of what value their assets would retain is an interesting one. It may depend on how loyal their fans are, whether the accounts can be maintained by family members or paid employees and whether their brand has diversified. If they offer content that could continue to offer value such as courses, books or other products then their digital assets may still hold value and put them in a similar position to the business mentioned above.
The important point is to make it easy for your digital assets to be valued. Ensure that your executor are aware of all your online accounts from PayPal to cash-back sites to online gambling.
Begin to plan your digital legacy by making a comprehensive list of your assets. Your Executor will not be able to act on accounts they do not know about and digital assets are less obvious than physical ones. The number of assets and accounts you have may be a surprise. Particularly if you don’t consider yourself to be very tech savvy!
As a starting point list email accounts, social media accounts, online shopping accounts, storage services, streaming or downloading services, websites and blogs, and financial services.
Decide whether you would like each asset to be passed on, deleted or some other action, such as memorialisation, to be taken. It’s worth talking to your family about this as you might talk about other parts of your Will so that they are aware of your wishes.
Public option is divided over what should happen to digital accounts and devices after death so make you wishes clear. Some people prefer wholesale deletion and others see the accounts as a form of online memorial so leaving it for your family to decide could result in disagreement.
Also, look at the user agreement you have for each account and see how this might impact on your plans.
Useful to know about is the ‘Tell Us Once’ service which informs local government services and organisations such as the HMRC without the need to contact them individually.
Review your list of assets regularly and add new accounts and assets.. As with your Will consider regularly if it still reflects your situations and how you would like your assets to be distributed.
The best person to discuss your digital legacy with is a legal professional. They will be able to advise you on the best approach for your situation and required outcomes whether that’s setting up a Lasting Power of Attorney, passing on your business or sharing your photos.
Digital estate planning tools are now offered by insurance companies, banks and organisations such as the Digital Legacy Association. These are a good starting point to get you thinking about the assets you have and the options, but it is no substitution for talking to a solicitor with experience in Wills, probate and trusts.
At Romain Coleman, our Will services seek to give you peace of mind by ensuring that your interests are protected and your wishes are carried out. Initial enquiries are free of charge and mean you will be aware of what actions you will need to take for estate planning.