Death and digital assets

With modern times come modern problems. The technologies that make our lives so much more convenient also add layers of complexity to those same lives. When great-aunt Cecily died, all those years ago, she left behind a house with a garden, a modest bank account, a few shares, her grandfather’s antique fob-watch and, perhaps, a porcelain dinner service. Nobody had to worry about locating her digital assets. Or, indeed, digital anything.

Now, there is an added layer of complexity on death – the digital estate. Most of us interact with the online world to some degree and millions of us earn our living through it. It is now becoming very unusual to encounter anyone who does not, at least, have an email address and most people have at least one social media account. The vast majority of us now have a digital footprint that can be divided, broadly, into two categories.

Sentimental digital assets

Do you have a Facebook page? What about a Twitter account? An Instagram page? A LinkedIn profile. Maybe you have a personal blog which you use to write about your life, work, travel experiences or cooking adventures? Take some time to look back through the years of your output on these platforms and you may well find hundreds of photos and videos of the places you have visited, the friends you have spent time with and the activities you have enjoyed.

In aggregate, they amount to a treasure trove of your memories and others’ memories of you. While they are unlikely to have any commercial value, they will have significant sentimental value for those you leave behind. You can and should take steps to ensure that your Executors can access all of these profiles, platforms and accounts after you have gone.

Commercial digital assets

We live in the age of the digital nomad (a person who earns his or her living online) and the internet entrepreneur (a person who creates businesses which operate entirely online). It is common for digital nomads and entrepreneurs to have purely internet bank accounts such as Paypal. Many people also have substantial digital literary and music libraries. Moreover, this is also the age of cryptocurrency and Non-Fungible Tokens (NFTs) – unique items of purely digital art that have value and which can be traded for profit.

These are all examples of digital assets that have commercial value and that means that anyone who owns these digital assets needs to ensure that they can be passed onto their beneficiaries on death. Furthermore, as these digital assets form a part of the value of the deceased’s estate, a full account of them will need to be prepared and submitted to HMRC as part of a Return for Inheritance Tax.

Planning ahead and protecting digital assets

The digital world has evolved so quickly and so extensively that the law has been unable to keep pace. Consequently, there are significant unresolved issues about who, exactly, owns digital information stored on internet platforms and who has a right to access them after the death of the account holder.

There have already been several high-profile cases where relatives of a deceased person have encountered enormous difficulties when trying to access the deceased’s digital assets. For people in the UK, this struggle could prove even more difficult as many social media and other internet platforms are based in the USA, and they will only recognise a Grant of Probate issued by an American court. For most British people, obtaining this will not be feasible, leading to a situation where the deceased’s assets could simply be lost forever.

The lesson to be drawn from this is not to wait for the law to catch up because it may never actually do so. However, there are steps you can take to ensure that digital assets after death are not lost.

Make a Will and a Lasting Power of Attorney

These are two steps you need to take in order to plan ahead effectively and protect and preserve digital assets on incapacity and death. By making a Will, you ensure that your assets are disposed of according to your wishes when you die. An English Will is widely recognised in many jurisdictions as an effective succession document. You can appoint as Executor someone whom you trust to manage your estate. You also have the option of appointing a specific “Digital Executor” as well as general Executor. You can then make a comprehensive list of your digital assets, accounts, websites, businesses, banking facilities with all log-in details and passwords and leave this document with your Will in safe storage.

Similarly, you should seriously consider making a Finance and Property Lasting Power of Attorney in case you ever lose mental capacity. You are free to appoint more than one attorney and, again, you may decide to appoint a general attorney and a specific “Digital Attorney”. Again, you should provide your attorneys with a schedule of your digital assets, as explained above.

Both Wills and Powers of Attorney are serious documents and the consequences of getting them wrong can be grave to disastrous. So, it is best to consult an experienced lawyer who can advise you effectively and ensure that these documents are drawn up to professional standards. You can, of course, also provide your solicitor with a copy of your digital assets schedule, as an extra precaution.

For further information and trusted legal advice regarding Wills and Lasting Powers of Attorney, get in touch with our team at Carlsons Solicitors.