The Dawn of the Digital Asset

According to the education campaign for payments, launched by The Payments Council, 25% of web users now log on to internet banking daily, and a further 39% bank online at least every week. Additionally, in the UK, there are a reportedly 35 million people who use Facebook with a further 10 million people using Twitter. Bearing this in mind, what about an individual’s digital footprint? It is reported that the average 30 year old may have a digital footprint spanning back some ten years. Remarkably, security company AVG reports that 37% of babies have an online footprint from the day they were born with a further 23% having pre-birth scans uploaded to the internet by their parents.

So, although the above is relatively easy to manage during the course of a lifetime, how do we ensure that our digital assets are dealt with after our death?

Welcome to the Age of the Digital Asset.

In light of the digital age’s rapid introduction to humanity the law is very much playing catch up when dealing with our digital assets; with any new legislation likely to be introduced when a cosmic change in society warrants it. There has already been one example of this in the press when it was alleged that Hollywood juggernaut Bruce Willis wished to pass all of his iTunes purchases to his children under his Will. This was later denied by his partner before it gathered pace. Whether this story was real or not, the point of the matter here is how we approach digital assets in our Will.

What is a Digital Asset?

Before we tackle the above, let us begin by defining the term “digital asset”.

Although the law in the UK, and globally, has not yet provided such a definition it is safe to say that a digital assets falls into the following categories:

  1. Financial value – for example PayPal, online banking and gambling;
  2. Sentimental value – for example YouTube, Flickr and Photobucket;
  3. Intellectual value – for example websites and blog content;
  4. Social value – for example Facebook, Twitter and LinkedIn; and
  5. Cyrtocurrencies – for example, Britcoin.

This article will only cover points 1-4 as point 5 deserves its own article altogether. Watch this space…

The Problems facing Executors when dealing with Digital Assets.

When an individual creates a Will, they nominate Executors and Trustees i.e. persons who will administer their estate in keeping with the terms of their Will.

The main issue facing executors when dealing with a digital asset of someone’s estate, lies primarily with how they access those accounts when necessary.

In the case of Bruce Willis, it was alleged that he wanted to leave his extensive ITunes collection to his daughters under his Will. However, Apple rejected this request stating that, even though he “purchased” those products, they were the ones who owned the collection. The nuts and bolts of this is that, although you have spent your hard earned money on buying products from Apple, you in fact do not own them as you have entered into a licensing agreement. Therefore, you are essentially paying for the use of the product with the intention of giving them back once your Will has been executed.

With regards to digital assets of a social value, Facebook has recognised that the whole process of dealing with assets under a Will can be a difficult affair; particularly when you are dealing with the loss of a loved one. As such they have allowed users to designate a “legacy contact” who can take control of the account following their death. Upon production of a death certificate, and verification of a person’s identity, Twitter will automatically delete the account. The same can also be said for Instagram accounts.

What can you, the account holder do, with regards to your digital assets?

The first port of call is to read the service agreement you have entered into with that company and check how your account will be dealt with as part of your estate.

Secondly, if you have entered into a Will that predates 1st October 2014, then revise it with your solicitor. If your Will, created before the above date, refers to personal chattels by way of a letter of wishes, then this clause does not incorporate digital assets under your Will. This is as a result of updated legislation that came into effect after the 1st October 2014 where the definition of chattels was revised to include intangible and tangible movable property (i.e. to incorporate digital assets). However, note that both versions of the chattels clause exclude property used in business, money, investments and digital assets of value, such as PayPal.

Thirdly, keep a digital asset log with your account details and ensure that this is updated regularly, whilst keeping both a hard and a soft copy of this log. With regards to the latter, use a software programme or a service which stores passwords; also known as a “digital locker”. This locker will then release your information to those nominated recipients at the appropriate time.

The future of digital assets and the Law

The Law Commission has recently announced its 12th Programme for Law Reform which includes a review, amongst other things, of digital assets. A draft bill is expected in 2018.

The overall situation regarding digital assets, and technology as a whole, has evolved so much so that the law is very much playing “catch up”. However, this certainly is not something to be overly concerned about. With the right planning any issues stemming from the execution of an individual’s Will, with particular emphasis on digital assets, can be done with relative ease.

If you have a query or would like to book an appointment please get in touch with our First Contact team on 01256 320555 or email mail@clarkeandson.co.uk