Given our growing dependence on digital technology to manage our everyday affairs, it has become increasingly important to consider what happens to our virtual assets once we die.
Digital assets in the context of wills and estate administration raise three key issues:
- How will the Personal Representatives (PRs) know what digital assets were held by the deceased?
- Who legally owns any digital asset?
- What value does such digital asset have in an estate?
1. Identify the assets
Unlike the more traditional assets such as bank accounts and property where there are paper statements and records that can be easily found by your PRs following your death, sites that manage your bank accounts, shares, investments and tax affairs online are commonly paperless and therefore far less likely to be traced. This creates a worrying problem for the PRs of the estate, as they have a duty to administer all the assets in the estate, which includes digital assets.
A useful way to assist PRs in managing your digital assets once you die would be to make a record of all your online accounts to be kept with your Will. This would need to be regularly updated so that the record remains accurate. There are also means by which passwords and login information can be stored safely and released to your PRs upon your death which should be considered.
2. Legal owners
Networking sites such as Facebook are frequently used for storing photographs, videos etc, however the ownership of any photographs uploaded to a profile remains with Facebook. The same principle applies to other social networking, media storage sites and email accounts.
Facebook ‘memorialises’ profile pages of those who die, which means that only friends can see the profile and can continue to post comments on the user’s wall. Both Twitter and Facebook accounts can be closed on the production of the death certificate, however login information is not handed out to family members for data protection reasons. A common problem for PRs is that even if they are aware that such accounts exist, it is then difficult to access them for the lack of login information.
Google has recently taken steps to address the issue of managing your digital afterlife, by launching the ‘Inactive Account Manager’ which is a tool designed to allow users to decide how they wish for their account to be managed once they die or where there has been a prolonged period of inactivity. Users can decide whether they wish to have data deleted or account information sent to certain trusted contacts in relation to services such as Gmail, Google+ and YouTube.
It is likely that this is simply the start of how we consider our digital inheritance and similar functions will be made available on other sites in the future.
Very often sites such as Facebook and Flickr may have sentimental value for family and friends, however online trading accounts, PayPal and betting accounts will have a clear monetary value. Those who are self-employed may have domain names, website and blogs that they use in the course of business, which may also have significant financial value.
The PRs are obliged to obtain values of such assets (including business assets), as this would form part of your estate’s intellectual property and must be reported for inheritance tax purposes.
In any event it is advisable to leave clear instructions in a Will on how your assets should pass. This will assist those close to you to manage your affairs once you die, as failing to do so may cause unnecessary difficulties and potentially disputes between family members. In relation to digital assets, it is even more crucial to leave sufficient information for your online affairs to be managed, as without this many memories and valuable assets may be lost in the virtual world altogether.
This article was written by Ian Bradshaw, Partner, Private Client, with assistance from Amantha Seneviratne.
This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you are a PR in an estate containing digital assets and would like assistance the valuation, management, or distribution of such assets, or you are planning to leave a Will that includes provisions relating to the passing of such digital assets, then please contact Ian Bradshaw, Head of Private Client or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.