Recent decades have witnessed the demise of the traditional and tangible, and the extensive evolution of the “digital age”.

In this “digital age”, we handle our data differently; with more and more people managing their financial, professional and personal lives online. Devices such as tablets, laptops and smartphones make it easier than ever for people to stay connected to the digital world.

According to a recent survey conducted by Goldsmiths College on behalf of web-hosting and cloud computing company Rackspace, at least one in ten people in the United Kingdom has left or intends to leave their internet passwords to their loved ones in their Wills. The study, entitled “Generation Cloud”, found that 53% of those surveyed have password protected “treasured possessions” stored online; such as e-mails, music, videos, e-books, games and photographs; often worth thousands of pounds and making physical collections a thing of the past. Accordingly, and unsurprisingly, many testators now wish to make provision in their Wills for how their online accounts will be managed and how their digital possessions will be distributed when they are no longer around.

Many people are making the decision to leave their passwords to cloud services and websites, such as Hotmail, Facebook, Twitter, iCloud and iTunes to ensure that their personal data can be archived, deleted and monitored after they pass on. Others are making the decision to leave their passwords in their Wills to enable their families to access their digital possessions. In any event, it is clear that people should be – and that increasingly, they are – thinking about making arrangements for their digital life after death.

An increasing number of businesses have recognised a demand for services that help to manage digital estates after a testator has passed on. New websites exist which allow a testator to make provision for named persons to gain lawful access to their online accounts after they have passed away. Ultimately, this is achieved by completing an online form, which upon submission, refers the testator to a lawyer, who can then ensure that the testator’s wishes are carried out with legal and binding effect.

Other websites claim to store a testator’s passwords and last wishes so that the same can be passed on and effected after their death. Some services even allow a testator to communicate their passwords from beyond the grave, by sending pre-written e-mails which may be scheduled to be sent up to 50 years in advance. It is worth noting that services such as these can be expensive and ultimately of no legal effect. The law dictates who is entitled to a testator’s assets. The only way to truly ensure that your assets are dealt with and distributed according to your wishes is through a carefully considered and legally effective Will.

Interestingly, purchases made with iTunes and Amazon accounts are non-transferrable upon the death of the purchaser and will fall outside of a Will. If a testator buys an album or an e-book from a digital store, he or she is ultimately only purchasing a licence to play that album or read that e-book. Amazon’s Kindle Store Terms of Use expressly prohibit a user from passing on their downloaded e-books:

“Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sub-licence or otherwise assign any rights to the Kindle content or any portion of it to a third party.”

Accordingly, such licences are granted exclusively to the purchaser and are not transferable upon death through a Will or otherwise.

While it is becoming more and more commonplace for testators to leave their passwords and usernames behind in their Wills, the decision to do so is not without its risks. Testators must consider security issues – when Wills are admitted to Probate, they become matters of public record. This may expose online accounts to the possibilities of abuse and fraud. One way of circumventing this risk is not to leave passwords and usernames in Wills, but instead in a discrete note which may be referred to in the Will and stored separately alongside it.

Another matter for people to consider in this “digital age” is whether they should prepare an Enduring Power Attorney. An Enduring Power of Attorney is a legal document by which a person (the “Donor”) hands over to someone else (the “Attorney”) the power to deal with and decide what is done with the Donor’s financial affairs and property in the event of the Donor’s mental incapacity.

An Attorney is under a legal obligation to act in the best interests of the Donor and to consider his needs and wishes insofar as is possible. An Attorney’s role is invaluable in the event that a Donor becomes mentally incapable of looking after his own online affairs. Without an Enduring Power of Attorney, even if someone knows the Donor’s passwords, they will be unable to legally access the Donor’s online accounts, such as bank accounts, e-mail accounts and social networking sites in the event of the Donor’s mental incapacity. Inevitably, this will make managing such a person’s affairs much more difficult.

In summary, anyone wishing to ensure that their assets pass to those persons they wish to benefit upon their death should make a Will, and to guard against the difficulties of future mental incapacity consider an Enduring Power of Attorney.

The traditional legal Will making process must now keep pace with modern life. Full consideration must now be given to making ‘digital legacies’ and the protection of online assets and personal data.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.