As the recent news story about a man who mistakenly threw out a hard drive containing Bitcoin now worth c£250m demonstrates, it is vital that we keep track of our digital assets to avoid them being lost.
The potential difficulties caused by failing to do so can be amplified after someone dies without leaving adequate information about digital assets and possessions for those who will deal with their Estates.
For increasing numbers of people, it's no longer enough to consider your cash, possessions and property when planning your affairs and making a will. Our digital interests now commonly extend to online bank and PayPal accounts, digital currency and wallets, National Lottery accounts and the fruits of creative endeavours such as intellectual property including films, eBooks, original music and photography.
Beyond those assets which might be quantified in financial terms (and which therefore have the potential to affect the value of the estate for inheritance tax purposes), there is the enormous sentimental value attached to personal photographs, videos and an individual's online presence generally. It is these aspects of our digital lives which are often capable of generating the bitterest dispute over ownership of this material amongst family members when a loved one dies without leaving directions on how this material should be accessed and dealt with, and, for example, whether they want social media accounts to be memorialised.
Whilst it is the case that many sites and platforms operate on the basis that licences to use them terminate on death and content can't therefore be left to someone in a will (and may even acquire the rights to photos and other content you upload to them), you do own assets which are stored on your own devices. It makes good sense, then, to back up such material on hard drives and leave instructions including passwords enabling access for those entrusted to deal with your estate.
A recent push by the Law Society has encouraged those considering wills and estate planning to think about providing their intended executor with relevant passwords and codes so that they can access and safeguard information and assets when the time comes. For those with substantial digital assets, naming a 'digital manager', perhaps a chosen executor, to deal with these assets after their death is worth considering. This followed a Law Society survey which found that 93% of people having recently made a will had not included any digital assets in it. Bearing in mind how much of our lives are conducted online, and the unstoppable trend towards everyday bank and utility accounts becoming paperless, it pays to adjust the way in which we think about our assets and belongings by going beyond the tangible.
In the absence of this information being provided to a trusted family member or intended executor, and where digital assets are not addressed in a will, it leaves Executors in a difficult position when they are faced with questions about who is entitled to them and, as experience has taught us, where there is ambiguity, litigation can follow.
To avoid potentially costly arguments about the ownership of digital assets after death, the following is recommended at a minimum:
- maintain and keep current, hard copy list of logins, passwords and codes for all online accounts, as well as for your devices where important information may be stored
- tell your intended executors that you have made a list – but don't give it to them or include the details in your will – a will becomes a publically available document once a grant of probate is obtained
- familiarise yourself with the terms on which any online services and accounts may operate following death or a period of inactivity, to avoid data or assets being permanently lost or destroyed
- keep important photos and videos stored on a cd or hard drive or print them off and keep them safely, somewhere your executors can find them.
Originally published 29 January 2021
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.