The use of digital platforms such as online banking, Paypal, gaming accounts, Bitcoin accounts, cloud accounts to store photographs, and social media accounts such as Facebook and Instagram continues to grow and is creating a new category of personal property – a ‘digital asset’ which is broadly defined as anything that you may own or have rights to that exists online or on a hard storage device.
Many of these digital assets have financial or sentimental value and people must ensure that their personal representatives know about the assets and can access them to administer their estates on their deaths.
The current situation for digital asset holders
Currently, English law does not adequately deal with what happens to these assets on the death of the account holder. The duties of the Internet Service Providers (ISPs) post death, as the custodians of the assets, are not clear. Further complicating matters is the fact that many of the content providers’ servers are based outside the UK, so there is nothing to compel the content providers to give personal representatives access to the assets and the area could become entrenched in conflicts of international succession laws.
The main basis for the content providers refusing access to digital assets is that in most cases, the underlying content of the digital asset is not owned by the individual. The view of most ISPs is that the service that the individual has purchased is merely a personal, non-transferable licence, which is specific to the deceased individual and allows them to use the content during their lifetime. A typical example: music purchased on iTunes cannot be transferred by gift or on death.
Each content providers’ terms and conditions will dictate what happens to those assets on the death of the account holder, and how much access the personal representatives will have in order to administer that asset. Most of these terms and conditions forbid the sharing of any online content, such as by way of a bequest in a will.
However, for those digital assets which are capable of being bequeathed in a will, the potential for loss to an estate if they are overlooked means that it is crucial for people to consider what will happen to them on their death, and whether their personal representatives will even have knowledge of them. Typically, individual assets are not be specified in a will, and personal representatives rely on a paper trail or their knowledge of the deceased’s assets in order to administer the estate.
Digital assets, which could have enormous value, are easier to overlook. For example, the Bitcoin, a virtual asset that can have substantial financial value, is saved in a password protected digital ‘wallet’. If the wallet, the password or the device on which the wallet is stored are lost, the asset, and its value, is lost permanently.
What should I do?
It is not advisable to leave passwords or information about your digital assets within a will. There are a number of services which will keep a secure record of your assets within a ‘virtual safe’, but the use of these portals is not without risk or cost.
A better alternative would be to leave a detailed log of your digital and non-digital assets to be stored alongside a will. This should be updated regularly, and will be made available to the executors on death to provide them with the information they need to administer and access these assets, or to contact the content providers where the terms and conditions prohibit a personal representative from accessing someone else’s account.
It is also advisable to regularly download any items of sentimental value such as photographs or emails. The executors will then be able to access the accounts and retrieve photographs or other sentimental items, or to report and collect in assets of financial value, before closing the accounts down, or requesting that the content provider closes them. It is also interesting to explore going forward what the scenario is when a digital intangible asset is stored on a tangible physical device, such as a hard drive.
You may recall the significant loss to one unwitting digital entrepreneur who discarded a digital storage device in clearing out his room in Newport, South Wales. The device contained some of the first bitcoins ever developed and in the sharp rise of this new currency the mishap ultimately caused the poor chap to throw away £4.5m into a land fill site!
The future of digital assets
Clearly as this area grows, the definition of ‘asset’ will need expanding to reflect an ever digitalised population and the increasing value which these assets hold; content providers will need to address the issue of how these assets can be accessed by the personal representatives and any value preserved for the estate.
For more information or guidance, please contact:
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This briefing is for guidance purposes only. RadcliffesLeBrasseur accept no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommend that appropriate legal advice be taken having regard to a client's own particular circumstances.