As we move more to an online world, it is vital to consider your online footprint when reviewing your estate planning, your Will and your powers of attorney.
Last year it was reported that there could be as many as 4.9bn deceased users on Facebook alone. We all know that we should make arrangements for what happens to our physical assets when we die but we also need to consider what happens to our digital assets.
As we increasingly live our lives online and spend large amounts of time and money there, it is as important to make our wishes for our digital assets known as it is for money, property and personal possessions.
A digital asset could be anything from:
- a photograph
- a music collection
- online bank accounts
- loyalty points
- a shopping account
- or even online currency such as Bitcoin
All of these can have monetary value that can be lost if not planned for adequately.
Unfortunately, UK law has not provided an easy solution to digital estate planning. Instead, a complex collection of different laws applies to provide different protections.
As set out in the Copyright, Designs and Patents Act 1988 applies to protect any intellectual property rights held online, Article 8 of the European Convention on Human Rights (incorporated into UK law by the Human Rights Act 1998) determines questions of confidentiality, whilst contract law determines rights of access to digital assets.
What many people do not appreciate is where these assets ‘exist’. Very often it will be in a foreign jurisdiction.
In the UK, any personal representative of an estate has a duty to collect and preserve the deceased’s assets (section 25 Administration of Estates Act 1925). Some assets, such as the contents of an iTunes account cannot be legally passed on because the user only buys the rights to use the files during their lifetime.
Other accounts will contain money or assets that can be passed on if the right procedures are followed. When creating online accounts, it is important to review the terms and conditions to which we subscribe, particularly terms applying to what happens if a user dies or becomes mentally incapacitated. Failure to do so could lead to data being destroyed before an executor/attorney can gain access to it.
Digital estate planning tools
Some internet service providers have their own digital estate planning tools. Facebook for example provides an option for users to appoint a ‘legacy contact’ who can take control of a deceased user’s page and memorialise it. Google has an inactive manager facility.
Others are not so kind and may automatically close accounts owned by deceased users, with others being frozen following death. To avoid unnecessary loss, consider the following digital estate planning points:
- How will your executor/attorney find and if necessary, access your assets following your death? Consider preparing a record of your online life-apps, email accounts, social networks, bank accounts and provide login details to those accounts.
- Do any of the relevant terms and conditions to which you have subscribed prohibit or limit how your accounts can be accessed or controlled by your executor/attorney?
- What hardware do you own and how will that be accessed following death? Would you wish to leave your PC/Mac/tablet/smartphone to a particular digital executor or beneficiary for them to carry out your instructions?
- How will your wishes be carried out? Would you wish to direct that any or all of your computer devices be cleared of content before being distributed to recipients/beneficiaries?
- What rights and interests do you legally own and what rights and interests do you hold under a licence type arrangement that will terminate on your death?
- Are your assets restricted by confidentiality agreements that you have signed? In some cases, for example, assets that you believe to be yours may be owned by your employer.
- Does the digital asset have any value and if so, how can that be realised post-death? If assets held online have more than a merely sentimental value, consider including them in a separate legacy with Digital Executors appointed to safeguard them. The Digital Executors can then exploit any intellectual property that you may have.
- If photographs, blogs and tweets have a sentimental value, consider who you would wish to pass them to. Since the advent of the Inheritance and Trustees Powers act 2014, for Wills executed on or after 1 October 2014, personal chattels broadly include all tangible assets but will not include digital assets which by their nature are intangible. Specific wording to make these gifts must therefore be incorporated into your Will.
We hope you found this article interesting and useful; it was written by Louise Lewis at Freeths, a top 50, full service commercial law firm.
The Society of Trust and Estate Practitioners (STEP) has a special interest group for legal practitioners working with digital assets of which Louise Lewis was a founding member.
If you would like to know more about protecting your digital assets, please contact your Ascot Lloyd Adviser.