A ‘digital legacy’ should be an integral part of the instructions within a Will, says Natalie Smith, an associate in the private client team at law firm Lodders.
“The use of social media, cloud storage, online banking accounts, emails and an array of digital platforms and accounts, continues to grow,” says Natalie, a specialist in writing Wills, Lasting Powers of Attorney, probate and tax planning, and a fully qualified member of STEP, the Society of Trust and Estate Practitioners.
“Whilst we are creating personal digital assets at a record pace, the laws governing them have not developed alongside, and it remains unclear where the notion of digital assets fits among other traditional concepts of property, especially when it comes to a Will. Nor is there any UK case law to shape what happens to someone’s ‘digital estate’ and its contents after they die.
“It is vital that people ensure their Wills include information for executors specifically about their digital, online presence, and this is something that must be seen as of equal importance as a life insurance policy or other investment.”
According to recent figures from Ofcom, 72% of adult internet users have a social media profile. Facebook has 31 million (60% of the population) users in the UK, Instagram has 14 million active users each month, whilst globally Twitter has 320 million active users each month.
“Our possessions are becoming more digitised, which is creating a new category of personal property – a digital asset,” says Natalie. “From social media profiles to online bank accounts, a digital life is likely to survive a lot longer than any of us.
“A digital asset is anything you may own, or have rights to, that exists either online or on hard storage devices. This includes email, social networking, iTunes, cloud storage and financial accounts, as well as hard storage devices such as computers, laptops, USB’s, smart phones and any external storage drives which are locked by way of encryption.
“Whilst UK case law surrounding the transfer of all digital assets is non-existent, there are various US cases and legislative developments that have addressed this issue,” says Natalie. “Whilst not based on UK statute, this is relevant as most contracts between online account holders and internet service providers are governed by US law as the majority of providers are US companies.”
Natalie says a good starting point is to consider which parts of a digital estate you wish to be passed on and who you wish to have access to them – many would not want every member of family to be able to pick through their private emails. Then consider a safe place to keep details for these accounts so they cannot be accessed by anyone until these are needed by executors.
The ‘digital assets inventory’ should include: email accounts and their login and password details, social media accounts, websites owned or with which accounts are held, cloud storage services, frequent flyer miles, songs and videos, and medical records online.
“The Law Society recommends a personal assets log,” Natalie explains, “to include social media and other online accounts, so that executors can access and close all online and social media accounts when their owner dies, as well as retrieve photos and other items of personal or sentimental value.
“Also, be sure to take inventory of all the digital devices you own. In terms of financial accounts, take inventory of banking, stock trading, credit card, and shopping accounts. Any service used and which involves online financial transactions should be included.”
A number of ‘digital legacy’ companies have recently been set-up, but Natalie says these should be considered with caution: “Storing vast amounts of private and secure information in one place online is an incredibly insecure method of passing on digital assets – if this one password is compromised, a hacker would have access to your entire digital estate.”
The STEP (Society of Trust and Estate Practitioners) Digital Assets Working Group (DAWG), a sub committee of the STEP Mental Capacity Special Interest Group, is currently working on guidance on how private client solicitors should deal with digital assets on death and loss of capacity, and is liaising with the Law Society of England & Wales.
Lodders Solicitors is an established and thriving law firm based in Stratford upon Avon, Henley in Arden and Cheltenham. The firm is recognised as a leading private client law firm, offering specialist advice to both private individuals and privately owned businesses, including its highly regarded work in the agricultural and real estate sectors. For more information: www.lodders.co.uk.