What happens to your ‘digital assets’, such as family photos, when you die? Find out why you need to make plans for them now.
Here’s a conundrum: pick up your phone – not to scroll through social media, rather to take stock of what your device is storing for you at this moment in time.
Are your cherished photographs uploaded to iCloud or Instagram? Your favourite songs on Spotify? The film you bought from Apple TV to while away a commute? Access to your worldly savings through Monzo?
Now take a moment to think what about what would happen to all of that digital content if you died, but had not made any provision for it to pass to your loved ones in accordance with your wishes.
Our digital estates have over recent times become subject to increased focus. And while you might have given thought as to what happens to, say, your home or your bank accounts on your death, have you carried out the same planning exercise for those intangible assets which live principally within our technological devices?
- 1 Why a widow had to take Apple to court to get her family photos
- 2 Your ‘digital assets’ could be highly valuable
- 3 Who owns your online music and other assets?
- 4 Some companies are making it easier for bereaved family
- 5 How to protect and plan for your assets in case of death
- 6 Plan for your digital assets as you would the rest of your estate
Why a widow had to take Apple to court to get her family photos
Take the court case, heard in 2019, of Rachel Thompson, whose husband died suddenly and tragically without having made a will.
Although Ms Thompson received her husband’s physical estate in accordance with the laws of intestacy, she unwittingly discovered that she had no access to his digital assets, which included highly sentimental photographs and videos of their family.
Ms Thompson, not prone to taking many photographs herself, was set to lose the treasured memories which had been digitally cultivated on her late husband’s device.
Despite presenting a Grant of Probate to Apple, which in usual circumstances would allow companies or banks to transfer assets to a beneficiary on its production and generally without question, they would not provide Ms Thompson with the necessary login details so that she could access her husband’s digital iCloud content.
It eventually took going to Court to obtain an order enforcing access, which would undoubtedly have caused enormous strain, both financially and emotionally, in the midst of grieving.
Your ‘digital assets’ could be highly valuable
Yet despite this, recent studies have found that few people give little, if any, thought to this increasingly pressing and highly relevant issue. The tide is slowly turning against the historically much-ignored notion of enshrining one’s “traditional” assets and post-death wishes in a will. It is not clear, however, that the same can be said for digital estate planning.
“Digital assets” include your email accounts, music libraries, online content, social media accounts, photographs and cryptocurrencies. Accordingly, your digital estate could be both of a very high sentimental and monetary value.
Take, for example, Bitcoin. This particular cryptocurrency is accessed through a private key, and so if those details are not made available to executors on your death then the value of your cryptocurrency may well be lost, depriving chosen beneficiaries of their inheritance.
Another vital consideration is that cryptocurrencies are declarable to HMRC as part of your inheritance tax account in exactly the same way as your house, personal chattels and bank accounts are.
If no one knows your Bitcoin’s worth because they are unable to gain access, the inheritance tax account would not reflect the true value of your estate.
Who owns your online music and other assets?
The legal position around ownership of your online music or social media library makes planning for these somewhat trickier. Most people don’t realise that individuals tend only to have a lifetime licence to access, upload or remove digital content from sites such as Spotify, Instagram or anywhere they might watch films and boxsets.
There is often a clause buried in the terms and conditions stating that such a licence is not transferable. This means that on death, ownership of the content goes back to the company and not to a person’s relatives or friends.
This could be galling for someone who has, for example, spent thousands on an online collection of e-books or uploaded a multitude of photos to Facebook.
Some companies are making it easier for bereaved family
Some companies are starting to give thought to this (although it is by no means near full resolution). Google, for example, has launched an “Inactive Account Manager” function, allowing you to decide what happens to your Gmail, YouTube and other Google-based online tools when you die.
Similarly, Facebook now lets its users appoint a so-called “legacy contact”, who can in certain respects look after a deceased’s account: a chosen contact is able to memorialise an account, request the removal of an account and, crucially for most people, access and download photographs if they are given the specific permission to do so.
How to protect and plan for your assets in case of death
As private client solicitors, increasingly we need to consider the concept of digital estate planning. Legally speaking, it is difficult to give very clear guidance and there is no definite legislation as of yet to assist in this regard.
Giving out your password, for example, is considered by some companies to be a breach of user terms and not always advisable. Practically speaking, even if disclosure of passwords is permitted, there are obvious concerns about how you ensure accounts remain secure if every password to every account is written down on a piece of paper and stored in a wallet.
Principally it is a good idea to make a list of those assets which are exclusively online. You might want to consider dividing that list into assets which are of sentimental and financial value (the latter, as explained, having to be accounted to HMRC in the usual way for inheritance tax purposes).
Consider the terms and conditions of the accounts you use: can you pass your password to a loved one without breaching user terms? Are you able to store the digital material elsewhere, such as an external hard drive or cloud-based account to which your executor will have access?
Any specific written instructions about your online accounts, content or passwords should be stored safely and securely in a sealed envelope alongside your will at your solicitor’s office, to be opened only in the event of your death.
You might also consider including a specific digital assets clause in your will prescribing what you would like to happen to them on your death. This way it will be clear to your executors and trustees as to the nature and extent of their powers to locate, access, control, move, manage, modify or even delete any material held in digital format.
You may even want to appoint a specifically-designated digital executor to carry out this role.
Plan for your digital assets as you would the rest of your estate
It is not always easy to consider these issues, particularly in circumstances where there are less clear-cut solutions than there might otherwise be in the usual course of estate planning.
All things considered, however, giving this some thought now could prove invaluable in the future so that your family and friends know your wishes as to your digital assets – in the same way as for the rest of your estate – when you are no longer here to vocalise these yourself.
Lilly Whale is a solicitor in the private client team at law firm Goodman Derrick LLP.
Photo by Lindy Bake