Every day, our digital footprint gets larger as we continue to rely more heavily on technology in our day-to-day lives. From an inheritance and succession point of view, this poses an important question: What happens to our digital assets when we die?
Often when writing a will, people will consider any physical property they own as well as any investments and sums held in bank accounts. However, many will fail to consider their digital assets - whether this is a collection of sentimental family photos stored on their phone, writings on a computer or value of assets held in a cryptocurrency account.
A recent YouGov survey revealed that 52% of people left no instructions on how to access their digital accounts for when they pass away. When considering their succession plans, it is important for individuals to consider what their digital estate entails and what will happen to it on their death.
What are digital assets?
There is no legal definition of a 'digital asset' but it can be thought of as any personal property which is stored digitally. This can be stored intangibly online (i.e. in the cloud) or locally such as on a computer, phone, tablet or external hard drive. This means that a wide selection of assets can be classed as 'digital': photographs, videos, website domain names, blogs, social media, gaming or email accounts and cryptocurrencies. As technology develops, it is anticipated the range of property that can be classed as a digital asset will broaden.
As well as there being different forms of digital assets, these may have different types of value. For example, an online-only bank account will quite obviously hold financial value, whereas digital versions of family photographs or videos often carry sentimental value. Some people would consider that social media accounts such as Facebook, Instagram and Twitter hold social value. Finally, digital assets may carry intellectual value if they attract intellectual property protection, for example websites, documents or images.
Different assets will have different values to different people. For instance, there is a growing number of people whose careers are rooted entirely in their digital presence as 'online influencers'. In these circumstances, one Instagram account could hold financial, sentimental, social and intellectual value.
Due to the wide array of types of property which fall under the digital assets definition, all users of technology will have some degree of digital estate. Therefore, it is important to consider what you wish to happen the types of digital assets you hold.
Access to photographs, videos and documents
While in the past many photos, videos and documents would be held in boxes, most of these are now held digitally. This may make these difficult to access for family members who do not know the relevant passwords to access devices or accounts where these files are stored.
Case study: Accessing a deceased loved one's photos and videos stored on an iCloud account
Most iPhone users will have data saved on a cloud-based storage system run by Apple called iCloud which is password protected to ensure data remains private and secure. However, these security features pose difficulties for next of kin if the user passes away without leaving access instructions.
Under Apple's terms and conditions all user accounts are non-transferable and rights to the content terminate on death of the user, unless the law otherwise requires, in accordance with Apple's policy on dead users' data. An Apple support guide lays out the process for acquiring access to a deceased family member's accounts and sets out Apple's policy not to release deceased user's data without a "court order" naming an individual as the "rightful inheritor of their loved one's personal information".
However, Apple has been criticised for forcing family members to jump through complicated and expensive legal hoops in order to obtain their late relative's data in an already emotionally demanding time.
In 2019, the widow of Matt Thompson was finally granted access to her late husband's photo library after a Central London County judgment in her favour. The legal battle took almost four years to obtain access to 4,500 photos and 900 videos after Matt died without leaving a will.
In her judgment Judge Jan Luba called for reform to the current handling of proceedings like this to make them cheaper and faster. There have been news reports of Apple releasing the information on an individual case basis if family members can provide a will and death certificate, although Apple has not updated its policy for the transfer of digital assets on death. This case shows how time consuming, expensive and difficult the process of obtaining access to digital accounts can be for loved ones.
Apple encourages its users to add provision to their will which "covers the personal information they store on their devices and in iCloud. This may simplify the process of acquiring a proper court order and reduce delay and frustration for family members during a difficult time."
Interestingly, some physical assets which are gifted to beneficiaries in a will also contain the gift of the digital assets held on the devices. For example, when the author J G Ballard died, he left the legacy of a laptop containing two unpublished works to beneficiaries. The manuscripts were later published, creating royalties for beneficiaries.
However, it is important to be aware that not everything held digitally may be classed as an asset. Many personal online libraries such iTunes and Amazon for songs, films, eBooks and podcasts are held by licence only. These are not owned by the service users, meaning the terms of the agreement for these services prohibit these from being transferred to others.
Websites, blogs and domain names
In order to keep access to a domain name, fees must continue to be paid when they fall due. If that does not happen, the domain name may expire and be auctioned off available for others to buy.
Special consideration must be given by those who own a business domain or website to ensure continuity of the business and to avoid financial loss resulting from lack of access to the business website.
Access after death to online accounts such as email or social media accounts throw up a multitude of difficult issues to contend with. Different internet service providers (ISPs) will have different Terms & Conditions that customers agree to in order to use their services. These should be checked to see what conditions there are about the transfer of digital assets upon death - especially as these conditions may not allow the sharing of passwords. These issues must all be considered if continued access is to be facilitated.
In terms of social media accounts, each platform has a different procedure for what happens to an account on death of its owner. They may allow a page to be archived, to be managed by a 'legacy' or 'trusted' contact of the deceased or simply to be deactivated.
While many online service providers have a system in place for when their users die, there is no consistent application across these platforms and some have no provisions in place to recover accounts. Therefore, it is important to plan based on the types of accounts and who should be able to access these.
Cryptocurrencies such as Bitcoin hold demonstrative financial value. However, they may not be as easy to locate and transfer on death compared to typical financial assets held in traditional investments. As cryptocurrencies are not yet centrally regulated, an individual's value held in the currency is stored in their online 'wallet' which only they can access by a series of codes.
If an individual does not remember how to access their account, there is no way to provide access by resetting a password like other online accounts. Similarly, if a user dies without leaving information regarding their access codes, it may be impossible to access the cryptocurrency. Therefore, due to the nature of cryptocurrencies, provision must be made to pass on access to cryptowallets to avoid the loss of these assets on the death of the holder.
As our reliance on technology increases, so too does the breadth and value of our digital estates. With our lives increasingly being lived online, it is important for those thinking about their inheritance plans to consider the value and content of their digital estates. Planning what will happen to our digital assets on death will make it more likely that loved ones get the full value - whether financial, social, intellectual or sentimental - of the digital assets we leave behind.
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.