Consumers must beware potential ownership issues following death or loss of capacity
Clients should not overlook digital assets as part of their estate planning, the Law Society has recommended.
Gary , partner at Joseph A Jones Solicitors, said: “When you’re taking will instructions, if you’re using the Wills and Inheritance Quality Scheme protocol, there’s a personal asset log there that clients can write down all of their assets, including their digital assets.”
Digital assets are defined as any asset accessed or held online, so an assets log will help family or professional advisers locate them.
“We are leading a digital life,” said , “and that needs to be taken into account when making wills.”
The advice says that having a list of all online accounts, such as email, banking, investments and social networking sites, will make it easier for family members to piece together a digital legacy, adhere to an individual’s wishes and could save both time and money.
“If you have a Twitter account, your family may want it deactivated and – if you have left clear instructions – it will be easier for your executors to have it closed,” he added.
Half the problem of not being able to close social media accounts after a client dies is that a will was never been made in the first place.
“If you have an up-to-date valid will with appointed executors, you’re halfway there to getting these things sorted out as it’s the solicitor who has the golden ticket to unlocking the assets,” said.
However, personal assets log should not list passwords or PINs as an executor accessing the account with these details could be committing a criminal offence under the Computer Misuse Act 1990.
Leaving a list of online accounts and ensuring it is kept current is enough.
, who contributed to the recommendations, said solicitors shouldn’t be penalised if they do not make clients keep a log of digital assets.
The society said a practice note on the matter is on the agenda.
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“The recent recommendations from the Law Society in relation to this problematic area of law should be seen as a promising start but much still needs to be done.
“There are multiple problems currently facing private client solicitors within this remit, and they won’t be solved any time soon. The location of digital assets for starters may lead to multi-jurisdictional legal issues in getting access to the asset.
“There is currently no joined-up international law on the subject. Questions could also be raised over the actual ownership of the assets, such as music which is often held by the individual on a licence that cannot be transferred.
“As well, there are legal, practical and security difficulties with using someone else’s password, and there are valuation issues of assets for fiduciaries when dealing with taxes such as inheritance tax.
“Another issue is the delay in getting access to the assets. For instance, key information, held online, used in the running of a small company could be inaccessible for a lengthy causing significant difficulty to that company.
“Currently, the Uniform Law Commission in the US is drafting suggested legislation.
“However, until that is done and then adopted worldwide, it is essential to make your clients aware of the issues, keep accurate records, be aware of end-user agreements and sometimes taking the old-fashioned approach and occasionally press print.”