When we refer to digital assets we mean –
Most law relating to wills and probate is Victorian in origin, and we sometimes struggle to make modern concepts – social media – fit in with Victorian legal ideas.
The physical devices we use such as computer hardware and memory sticks are easy to deal with as we can call them “personal chattels” – like sofas and fridge-freezers.
But what about social media accounts? YouTube channels? In the case of subscription accounts such as iTunes, Google Play and Amazon Kindle, the position is generally that an individual has a limited licence to use the piece of music, movie or book, rather than ownership. As such, often both the collection and the account would be non-transferrable and therefore of no value.
To begin with though there are other hurdles the executor has to overcome when trying to establish what assets there are and what value, if any, they have. Firstly, he needs to know about them – finding them will be impossible without someone having been told the asset specifically exists. Beware the friend or family member who is aware of the account but who keeps quiet so that they can take the money for themselves!
Beware also the secretive gambler! There may be unobvious sources of funds – or liabilities – if the person who has died is an on-line gambler for example. No-one may have been told what they do, and so any cash balance may be lost, and we may be unaware of on-line liabilities.
It is important for people to record their on-line life so that, after their death, their executors will know what might be out there and what has to be dealt with.
Sharing logins and passwords is an essential part of this. If you use a password manager program, you can simply share your access information to that account. If not, it's important that you record the login and password information for key accounts. If you have computing hardware, such as computers, external hard drives or flash drives, tablets, smartphones, digital music players, e-readers, digital cameras, etc., you should also record where those items are located, as well as any passwords that are required to access them.
Another problem is whether the executors have authority to access the computer material? The Computer Mis-use Act 1990 created some new criminal offences connected to computer hacking but which could apply here:
- Unauthorised access to computer material;
- Unauthorised access with intent to commit or facilitate a crime;
- Unauthorised modification of computer material;
- Making, supplying or obtaining anything which can be used in computer mis-use offences.
There are ways around this – it has been suggested that if you were to give your solicitor a sealed envelope containing access to your list of accounts, usernames and passwords, which was not to be opened until after your death, that would not lead to the commission of any offence under the Act if the executor opens it after your death to use the password information. This does only work where the password list is up to date of course!
It is possible that an experienced digital asset owner will know to appoint a separate executor to deal with his digital estate. Anyone working in the digital world really should have considered this because some family members (and some professionals!) will have no relevant knowledge to deal with the digital assets on the deceased's death.
This might be necessary where the rest of his estate can be managed in the ordinary way; but there is no-one in his or her immediate circle with enough computer literacy to carry out some of the tasks necessary for finding and realising digital assets.
Valuing digital assets can be another problem. Money based accounts are valued in the normal way but we have to know where they are! Certain “e-material” does not actually belong to you even if you have 'paid' something for it e.g. music held in iTunes.
The terms on which you hold 'digital assets' is important to establish. An iTunes account will die with you (so there is nothing to leave and it has no value) but now it is possible to have a 'family' version which enables other members of the family to have access to the data.
In most circumstances it is unlikely that social media accounts will be intrinsically valuable but they may be vulnerable to identity theft and cannot be ignored.
Another modern phenomenon which would leave most Victorians non-plussed is virtual or cryptocurrencies with no physical existence but which are used to purchase goods and services on-line
A finite number of Bitcoins, for example, 'exist' — 24 million (something to do with mathematics!), and Governments around the world take the phenomenon seriously. Even HMRC have issued a Brief about how it will treat Bitcoins – they treat Bitcoins like a foreign currency for corporation and income tax purposes.
A Bitcoin is stored in an electronic wallet to which transactions are recorded. There are smartphone apps which allow this electronic wallet to receive Bitcoins. The system is password protected.
However, as the currency is not linked to any Government, it attracts criminals who want to move money anonymously without security questions or state involvement. This makes Bitcoin a currency system susceptible to hacking.
The value of cryptocurrencies rises and falls just like any other, but we cannot ignore this potential asset since in November 2014 the Government estimated that 20,000 Britons owned Bitcoins which then were worth approximately £60 million.
The modern world of social media also presents intellectual property rights issues. By this we mean the text of a novel by a writer; digital images; YouTube video channels and so on. These intellectual property rights such as copyright will belong to you.
If you own digital assets can you pass them on? This is a legal minefield! It will depend on the contractual position which was entered into by you at the time. It would be hugely beneficial if you had downloaded and printed off the Terms and Conditions upon which you agreed to use the digital service or product. As you probably won’t have done this, there is a great deal of potential for disputes between competing family members and also the service providers.
With Digital media accounts - MP3s, digital movies and eBooks - many would consider there to be value in their collection and would therefore assume that their collection could be accessed and be passed on after their death.
However, in the case of subscription accounts such as iTunes, Google Play and Amazon Kindle, the terms of the contract with the company supplying the e-material will probably say that the company retains ownership of the data and it only gives the user a licence to use it.
It is useful to note that, although there is no right to do so and it’s not a published policy, Apple’s customer service team will often transfer an account following death. In addition, a device that holds such digital media may be transferred (along with any passwords) on incapacity or death, despite the non-transferability rules. But there would be nothing to stop the content providers suspending any accounts and access to the contents being lost. Anyway, wouldn’t we want to be able to direct where they go instead?
Cloud storage - We increasingly store data that we create in the cloud, rather than on physical devices. For example, many of our digital photographs are now only stored online. The right to access such accounts is again subject to the specific terms of the relevant provider.
Typically, such accounts, and all data held in them, will be deleted when the holder ceases to pay the subscription fees, or dies. However, you are usually able to grant access rights to others, so it is worth giving a family member the ability to access your account and your photographs if you want them to have access after your death.
Following death, the account can then be dealt with by the family member, and the photographs downloaded or transferred to another account. Another alternative is to maintain offline backup, such as on an external hard drive that you regularly update.
For further information on any aspect of obtaining probate, please contact David Roper in the experienced private client team on 01489 864 754 or email email@example.com.