What is a digital asset?
There is currently no legal definition of a digital asset in the UK, despite their prevalence in our everyday lives.
According to Wikipedia, digital assets are, ‘anything that exists in a binary format and comes with the right to use it’. In other words, digital assets can be anything that can be owned that isn’t in a tangible, physical form.
This includes a variety of different assets, including:
email accounts (eg Gmail, Outlook, and Hotmail accounts)
subscription service accounts (eg Netflix, Amazon, and Spotify accounts)
music, image, and video assets
pictures and document storage accounts (eg Google Drive and other cloud storage accounts)
gaming accounts and profiles
social media accounts and content (eg Facebook and Twitter accounts)
e-books (eg those stored on your e-reader, like a kindle, tablet, or smartphone)
It is likely that most people reading this article will have at least one digital asset.
How does the law deal with digital assets on death?
The law on digital assets in the UK is practically non-existent. Wills and probate law was not written to deal with the advances in technology that have occurred in recent (and semi-recent) years. It only really considers physical assets and property.
As there are no substantive laws dealing with digital assets, people don’t know how to handle these when writing their Last will and testaments. It’s being left to the providers of digital content to decide what they will allow consumers to do with their digital assets when they buy or share things online.
Should I gift my digital assets?
Many digital assets have little or no monetary value, despite holding a great deal of sentimental value, such as family photographs. Whether or not these assets are worth gifting depends entirely on their owner’s feelings on the matter.
Certain digital assets, such as cryptocurrencies, often do have a monetary value. Cryptocurrencies (such as Bitcoin, Ripple, or Ethos) should, therefore, be dealt with in your will.
You might even like to appoint a separate digital manager in your will if you do not want your executor (ie the person carrying out the administrative duties relating to your will) to have access to certain digital material following your death. However, the digital manager would have no legal power, unlike your executor.
Do I own my social media account?
Most digital accounts such as Facebook, Instagram, Kindle, Spotify, and Apple Music accounts are not actually ‘owned’ by the user. Instead, a user enters into a licensing agreement with the business providing the service when they set up an account. These accounts, therefore, are not assets you can give away under your will.
Whether you can gift a digital account depends on the terms and conditions of the account’s provider
Before attempting to leave a digital account to somebody in your will, you should check the account provider’s terms and conditions. Many common providers are US companies, so in many cases, you’ll have to rely on US law and the terms and conditions of the service providers have created under it.
As part of Facebook’s terms and conditions, users are not allowed to share their usernames and passwords, let anyone else access their accounts, or even transfer their accounts to anyone. However, Facebook offers a service that allows people to ‘memorialise’ accounts.
Memorialised accounts allow for friends and family to gather and share memories after a person has passed away. The account is left available for people known to the deceased to see, but it will not come up in public searches.
Instagram has a policy that states that, if an Instagram user dies, their relatives should contact Instagram to request either the deactivation and deletion of their account or, similar to Facebook, the ‘memorialisation’ of the account.
Google has a pragmatic approach to dealing with a deceased person’s account. They have an ‘Inactive Account Manager’, where people can set up what should happen to all their digital information and who should have access to it after the account holder has died. Google encourages forward planning and users setting out their wishes, similar to the planning that is done in a will.
Apple users can add a ‘Legacy Contact’ to their Apple ID, allowing the Legacy Contact to have access to some of the deceased person’s data stored in their Apple account for 3 years. Regarding music, TV shows, and films, a user is actually leasing the content and not buying it. Purchasing a show, film, or song through the iTunes Store grants you a licence to use the show, film, or song. However, the licence is non-transferable, which means that anything in your Music or TV library is also non-transferable (ie ownership cannot be passed to someone else).
Digital assets can be invisible to executors
One of the biggest problems with digital assets is that they can become invisible after a person’s death.
Even if the assets are stored in a visible format, such as on a physical storage medium, this may be overlooked by an executor. This may be because they do not actually see it (although it is there) or because the executor has so many other tasks to manage that it does not occur to them to check the medium.
If there is no list or inventory for the executor to follow, they may have the unenviable task of examining all of the deceased person’s hardware devices, opening up web browsers, looking at their web history. and so on, to try and ascertain all accounts and assets.
You can make a list of digital assets as part of your Last will and testament.
Digital assets can be impossible for executors to access
If you have a portfolio of cryptocurrencies, unlike money in a bank account, your executor cannot simply access the money by contacting the bank and providing the appropriate paperwork. Instead, to access cryptocurrency assets, the person entitled to deal with the deceased person’s money can only do so if they have the appropriate electronic proof of ownership. The way that cryptocurrencies operate is extremely complicated and outside the realms of this article, but essentially you need a wallet (often referred to as a digital wallet or e-wallet) and the password to the wallet. For more information on this, read Can you write your will onto a blockchain?.
On the face of it, this may not seem problematic. However, it raises serious concerns. The genuine owner of a cryptocurrency asset may forget or lose their password and be unable to prove ownership. Or, someone may fraudulently attempt to represent the genuine owner to claim the cryptocurrency asset.
While the example above is an extreme case, it illustrates the key challenges involved in managing digital assets.
The biggest practical step you can take to help your executors execute your will is to keep a memorandum of all digital assets and devices you own, and login and password details, kept separately in secure locations. You might consider storing this information in a sealed envelope with your will, on an external flash drive, or in password management software.
One final point is that, if you are an executor of a will with digital assets, you must always be mindful of the complex legal issues surrounding this area. These include the risks of infringement of copyright and intellectual property law, privacy violations, confidentiality breaches, and misuse of information, as just a few examples.
Digital assets are a fast-growing and highly relevant area of modern life, which the law is struggling to keep pace with. Therefore, if you’re planning your estate, it’s important to speak to an expert who is up to date with these topical and potentially thorny issues.
By way of example: Gerald Cotten
The high-profile case of millionaire crypto-trader Gerald Cotten shows just how you can lose control of digital assets in a devastating way.
Gerald Cotten died in mysterious circumstances, leaving some US $149 million in Bitcoin and other cryptocurrencies locked in wallets. The dead millionaire was apparently the only person who knew the encrypted passwords to the wallets. This left his executors unable to access this vast sum of money. Incidentally, the password was eventually broken, and the money was no longer there.
You can make a will that includes digital assets using Rocket Lawyer’s Last will and testament. If you require a bespoke will, consider using Rocket Lawyer’s Will drafting service. If you have any questions or concerns about leaving digital assets in your will, do not hesitate to Ask a lawyer.