Digital afterlife? Your guide to dealing with digital assets
By Bryony Cove and Caroline Pearce, Farrer & Co LLP
Every day, perhaps without realising it, we are creating an ever larger digital footprint of our personal and financial lives online. What happens to this when someone dies or loses mental capacity?
This article explores these difficulties and offers practical guidance to enable you to best navigate tomorrow's digital landscape.
The value of digital assets today, an estimated £25 billion of our assets in the UK are held online. Many digital assets are of predominantly sentimental value, for example memories stored on a laptop, in the 'cloud' or uploaded onto social media sites such as Facebook, Instagram or YouTube. Traditional media is now frequently purchased online, with iTunes and Spotify replacing record collections and the sale of e-books also increasing substantially. Significant revenues are generated online. The highest earning YouTube channel run by PewDiePie reportedly generated an income of US$7.4 million in 2014 as its 40 million subscribers tuned in. Non-traditional cryptocurrencies such as Bitcoin and online accounts generating reward points or frequent flyer points can also be translated into significant monetary value. It is important that digital assets can be located and accessed so that their value, both sentimental and financial, can be unlocked for future generations. Unfortunately, the legal position makes this far from easy.
The myth of legal ownership
Navigating the digital landscape
There is no doubt that the protection and preservation of digital assets can be a minefield. Ignoring the need to think about how your digital assets should be handled and shared after your death or on incapacity is simply not an option.
2. Digital assets with monetary value and any associated intellectual property rights will need specialist treatment in your Will. There is also scope to appoint a separate 'digital executor' who has the necessary expertise.
3. We recommend creating an inventory of all your digital assets and updating this regularly. It will mean executors and attorneys are able to quickly and easily establish the extent of the assets they are managing. For security reasons, passwords should not be stored alongside this. However, there are digital inheritance accounts, such as Password Box, which could be used. We would not recommend leaving this information in your Will (since a Will becomes a public document on death), but it is helpful if a hard copy of the inventory is stored privately alongside a Will or Lasting Power of Attorney.
4. Where possible, back up any digital assets stored solely in the 'cloud' onto an external hard drive. This will help guard against the risk of the service provider deleting everything and may preserve and protect digital assets after death.
These will always be non-negotiable standard terms, seldom allowing digital assets to be transferred on death. For example:
The licence to play digital recordings is not transmissible but can be used on up to five computers. However, Apple confirmed that they would be willing to transfer and close an account on presentation of a death certificate and grant of probate.
A deceased’s account can be deleted or 'memorialised' and preserved online. Since July 2015, account holders have been able to appoint an 'online executor' who can administer the page after their death.
An innovative service enables account holders to set up an Inactive Account Manager. Google will notify up to ten chosen 'beneficiaries' after an account has been inactive for a predetermined period of time, who will be granted access to the deceased’s account before it is terminated.
On receipt of a death certificate and grant of probate Microsoft will provide a copy of emails on a disc to the next of kin.
Accounts are terminated on notification of the death of an account holder.
Accounts are closed on presentation of a death certificate and grant of probate with a cheque issued for any leftover funds.
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.