Tags: Capacity, Inheritance, Probate
Over the past five years, internet use amongst the over 65’s has increased substantially and figures are expected to rise dramatically over the next decade as an increasingly tech savvy population ages. The question of what happens to our online presence when we die has never been so important.
What is a Digital Asset and why are they so important?
Like most people today, you probably keep, or access music, photos or books online. You have an email account, may use Facebook or other Social Media sites, do your shopping online, use PayPal, and so on. Perhaps you also have your own website, trade shares on the internet, use online auction sites such as eBay, collect frequent flyer miles, or even hold Bitcoin or other cryptocurrencies?
All these things can be considered Digital Assets and they may carry value. Website addresses can be particularly valuable - for example in 2010 the website domain ‘Insurance.com’ sold for a record-breaking $35.6 million, which serves as a reminder of how valuable some Digital Assets can be!
It’s not just financial value which digital assets can carry; they can also hold great sentimental value too. How many of your recent family photographs do you have hard-copies of, for example?
It is important to plan for what happens to these assets when we die or when we lose mental capacity, not only because of the financial and sentimental value involved, but also to ensure that our private and confidential information is not misused.
How do I pass my Digital Assets onto my loved ones?
Digital assets with financial value such as online bank accounts, PayPal, online shopping accounts and even reward points, and those assets which are copyrighted, can legally be passed on through a Will to your loved ones. Gary Rycroft, Chair of the Law Society’s Digital-Assets Working Group advises that ‘you have the legal right to manage the deactivation, memorialisation or removal of your digital social life, but you need to take steps to exercise your rights by making a Will.’
Some Social Media sites, such as Facebook are starting to lead the way and have implemented a setting to allow its users to nominate someone who can manage their accounts when they die, so they can be run as a memorial page, but such provisions usually require the original holder of the page to have made plans in advance, and to have nominated someone to be able to take this step on their death, and as a society, we don’t yet have a clear, unified approach to dealing with digital assets or an online presence, following death.
Some Digital Assets which are not legally ours to give away. Often, the use of online services grants us nothing more than a licence. There is a clear distinction at law between a licence to use and ownership - the difference being, you cannot give away something you do not legally own. Music stored on an online music library such as iTunes is a prime example of this – the account holder is licenced to use a the music, but can’t pass that right on.
So, what happens when I die or if I lose Mental Capacity?
When you make a Will or Register a Lasting Power of Attorney for Financial Affairs, you are granting your Personal Representatives the legal authority to deal with your assets on your behalf. They will have a duty to manage all of your financial affairs – including any digital assets.
However, they may find that their first problem lies in finding out that such Digital Assets exist, and then, gaining access to them. Often, there will be no paper trace of them. Any correspondence will have likely been sent to your email account, and without your password, your executor or attorney won’t have access to that.
Even once they have identified your assets, overcoming security can cause further problems for your personal representatives, who will need to access your account, in order to determine whether you have or an asset of any value, or simply to close your account. When access is obtained, there are questions as to whether they would be breaking the terms of the service agreement that governs the Digital Asset. Unfortunately many online organisations do not yet have procedures in place to allow Personal Representatives access to accounts. Other issues include the fact that many websites are hosted outside of England and Wales, in countries which might not recognise the role of a UK Attorney or Executor or may have additional requirements as to what they need in order to allow someone to access your account.
How to die in the Digital Age
For all of these reasons, it is increasingly important to plan ahead, and to think about what online presence and assets you have, and how to deal with them upon death or incapacity. We strongly advise that you make a Will (this is of course good practice whether you have digital assets or not!) but also that in doing so, you include provision for your Digital Assets to ensure that your wishes are carried out after your death. One sensible plan is to store an up to date, hard copy list of your Digital Assets and online accounts, with your Will, so that your personal representatives know what Digital Assets you have, and where to find them.
While there are security issues in doing so, advice from the Law Society and STEP Digital Assets Global Special Interest Group is to make sure your personal representatives know how to access your accounts and passwords. This might include storing a sealed envelope with your will or in another secure place, to be opened only upon your death.
If you have specific wishes, for instance about whether you would want your Social Media accounts to be deleted, or memorialised after your death, we recommend that you leave a letter of wishes (again, this can be stored with your will, and updated regularly as needed) and also that you check that these would be effective by looking at the terms of service agreements of the providers of your Digital Assets, to see what options may be available.
For further information and advice on making a will or a lasting power of attorney, including advice about dealing with your digital assets on death or incapacity, please contact a member of our private client team in our Frome, Keynsham or Midsomer Norton offices.