In an increasingly digital world, Solicitors are increasingly being asked to discuss with clients what happens to their digital assets when they have died. If clients don’t raise the subject themselves, then as a profession we have an obligation to do so.
Planning a client’s digital death involves practical consideration including everything from deleting their Facebook, Twitter and Netflix accounts, protecting their email against hackers, bestowing their music library to friends, managing their online financial interests and accounts with ebay, Paypal, on-line gambling and bingo sites, to their crypto currency held in a virtual wallets.
Solicitors dealing with probate also need to advise personal representatives when administering an estate that it will undoubtedly include digital assets and these will need to be identified, protected, accessed and valued.
How can Solicitors proactively assist clients with their digital assets?
The Law Society recommends that Solicitors advise their clients to maintain a ‘Personal Assets Log’ which should include a list of their digital assets. This will necessitate the need for a list of logins and passwords for all online accounts. This is not an easy or quick exercise I would suggest and many clients simply won’t have the energy or inclination to prepare such a list. If they do prepare a list, it goes without saying that this list will need to be held securely and constantly kept under review as passwords and accounts change so frequently.
There are commercial products increasingly coming to the market offering secure online storage for this kind of information, which if used and are still in existence when the client dies, his or her chosen Executors will once again need to be aware of where the information is stored and have the ability to access it when the client has died.
Clients should be advised to review their online accounts and check the various terms and conditions relating to those accounts. There may be specific terms on which digital assets will be administered on their death or if there is no activity on an account for a long period of time. It is worth noting that many Internet service providers will permanently destroy digital assets after a specific period of inactivity unless an Executor has made contact or taken steps if they are able, to maintain the account following the clients death.
Facebook and Google permit nominees to take control over certain aspects of their accounts. For Facebook this is a legacy contact and Google an inactive Account Manager. Clients will need to set up their chosen nominees during their lifetime.
Solicitors may suggest on a practical level to personal representatives who are dealing with a deceased’s estate, to consider delaying notifying some Internet Service Providers on death to prevent an automatic shutdown and deletion of online accounts which cannot then be retrieved.
An increasingly more difficult task can be trying to ascertain whether any intellectual property rights in any digital assets are owned by the deceased account holder on their death. It does come as a shock to many that they only have a licence to use MP3 files downloaded from iTunes during their lifetime and that licence terminates on death.
It has been estimated that by 2100 there could be 4.9 billion deceased users on Facebook. There are now a number of services that enable users to plan their online afterlives which enable users to post on social media and communicate with their friends after their death! For lawyers, advice to clients should not be about scheduling their status updates after their death, but having a discussion around whether they want their accounts to be memorialised which essentially means freezing their account. Only verified friends and family can see the deceased profile on Facebook and enables friends and family to post comments in remembrance of them. This should then prevent malicious posts from third parties and causing any undue upset or distress to family members and friends of the deceased.
Clients may wish to give written instructions to Executors requesting they leave a particular message for followers or friends. However, given the fast pace of life online and constant updates, these instructions will have to be reviewed regularly.
If clients are concerned that their accounts may be deleted soon after their death due to inactivity, they may want to print off hard copies, burn to a CD or download onto a USB stick photographs other documents that are only stored digitally and keep them in a safe place for their Executors to obtain following their death.
Alternatively downloaded copies of key documents and information could be kept on a laptop or tablet owned by the client rather than storing them solely online. Some Internet Service Providers offer access to downloadable content via a link. This can reference everything a client may have uploaded on an account which can provide a useful snapshot for the Executors of what an account contains.
Many of us own multiple devices, all of which have passwords to unlock them, thumbprints, or pass-codes, face recognition etc. Clients may want to consider making a note of the various passwords and login details for certain devices that may contain crucial information. Again there are, issues over security and having to regularly update this information apply.
Solicitors should consider carefully the terms of a clients Will to see whether digital assets have been adequately dealt with under a personal possessions legacy or under the terms of a specific gift.
In the absence of an express reference, digital assets with little or no Intellectual Property value are likely to form part of residue.
Digital assets such as photographs held online are likely to be of sentimental value only and a client may wish to consider including these as part of a general gift of his or her personal possessions. Most wills contain a standard personal chattels clause which references the statutory definition in section 55(1)(x) of the Administration of Estates Act 1925. It is worth noting that wills executed prior to 1st October 2014 which incorporate section 55(1) do not include digital assets.
The statutory definition was amended by the Inheritance and Trustees Powers Act 2014 so that post 1st October 2014 personal chattels include all tangible movable property apart from business assets, investments and money.
However, this modernised definition will not include digital assets which by their nature are intangible. Solicitors drafting wills to include digital assets should therefore amend personal chattels legacies to include intangible assets held digitally. It is important to exclude valuable Intellectual Property to ensure that this is not inadvertently included as the testator may prefer to cover those assets within a separate gift.
As the chattels clause excludes money, securities and investments, this would mean investments such as crypto currency and any balances held in Paypal or eBay accounts will need to be dealt with separately or as part of the residuary estate clauses in a will.
Crypto currency accounts such as Bitcoin can be difficult to deal with on death as the digital wallets will be password protected. They can also require a certain level of knowledge and skill to deal with them. Clients may wish to include specific legacies in their wills to deal with these holdings and should consider whether the executors they have appointed have the necessary expertise to administer the crypto currency accounts.
Clients may consider appointing separate professional executors to deal with assets which contain crypto currencies or other complicated digital assets.
If a deceased died without having made a will, his or her digital assets will not fall within the statutory definition of personal chattels that pass to the surviving spouse under the intestacy rules and instead will form part of the residuary estate.
Letters of wishes which have traditionally dealt with issues such as funeral wishes, and the gift of personal chattels such as jewellery, paintings etc. Any wills being prepared now for clients who have digital assets, letters of wishes, may now need to very detailed and contain specific instructions in how to administer those digital assets. The Letters of Wishes will also need to be regular reviewed and updated.
I think it is fair to say that all of us underestimate how much we store digitally. Our devices are designed without us even having to try to capture so much content and to open numerous online accounts without much effort. As solicitors we need to discuss with our clients the consequences of what happens to all of those digital assets when they are no longer alive to prevent distress, disputes, costs and complications for both family members and Executors.
This article was first published in the Solicitors Journal on 17 July 2019.