When someone dies, the person responsible for dealing with their estate traditionally looks through their bank statements and other financial documentation to identify their assets to enable them to complete the necessary inheritance tax account and to distribute the estate to the beneficiaries. But in an increasingly digital age where many of us have online bank accounts and other financial assets with no paper trail, it can be difficult to ascertain the extent of the estate.
If, as is increasingly the case, many of our assets are only referenced via e-mail, how can a person dealing with the estate be certain that they have found all the assets if they don’t have the deceased person’s e-mail password, for example?
It is not just financial assets that exist in cyberspace. Photographs and all sorts of other valuable family data may be stored in a cloud, and if no one knows where to look these assets might be lost forever.
The Law Society has recommended the completion and maintenance of a Personal Assets Log, including digital assets, and consideration of how to ensure that those dealing with the estate will be able to access those assets. For conscientious advisors when drafting someone’s Will this is now standard practice. But the question remains as to how that information is stored and passed on after the person’s death.
One possibility is to leave a sealed document to be stored with your Will, possibly at your Solicitor’s office. The downside of that is that should you be required at any time to change an important password you would have to remember to update the information in your sealed envelope.
Alternatively there are specifically tailored websites that offer a solution to some of these problems: asset lists can be created online, passwords and PINs can be recorded and updated where necessary, and online guidance can be provided after someone’s death. Such sites are not without their own inherent dangers, however. Even discounting the dangers posed by hackers, there is no guarantee that information stored online account will be up to date, particularly if an individual has suffered a period of mental decline before their death.
It is important to remember that even if passwords to online accounts are available, the accounts of a deceased person should never be managed online. Anyone attempting to make transactions using the account of a person who has died would fall foul of the Computer Misuse Act 1990. The asset holders would need to be notified of the death and their usual procedures should be followed to close or transfer assets.
Although there is no simple or one-size-fits-all solution to the question of how to identify online assets and data, this is something which anyone using online facilities needs to consider when making a Will.