Over the past few years I have built up a library of iTunes music and movies, so at Christmas, I was delighted to receive more iTunes vouchers to add to my collection. It got me thinking. Digital products are an important aspect of the modern age, so what happens to them when we die? People carefully consider their physical assets and who they will be left to, so should we also be considering our digital counterparts?
A virtual world
The use of filing cabinets to store a person’s important information and documentation in paper form is fast becoming a thing of the past. Instead, the majority of us are storing this information and documentation in digital form, either on a hard drive or similar device or through online storage options in the ‘cloud’.
Not only do we store our personal information digitally, most businesses are going paperless and storing our business and financial information online, secured by usernames and passwords.
What are digital assets?
How many of us now have online bank accounts, funds held in online payment providers such as PayPal, digital photographs, iTunes accounts? And what about domain names, online businesses? The list goes on.
Whilst ‘digital asset’ is a term of art that has no precise legal definition, most people recognise which digital assets they have created. They may be of monetary or sentimental value. They can be as prized and important as your physical assets. Examples include:
- Accounts used to manage money such as PayPal or online Bank Accounts
- Domain names
- Online businesses
- Artwork, music, eBooks or any digital intellectual property that generates revenue
- Computers & Hardware
- Data & information stored electronically on hardware or on the cloud
- Online accounts such as social media, email, online gaming accounts
- Intellectual property, e.g. copyrighted material, trademarks, computer code
Often assets with sentimental value are just as important to the beneficiaries as the assets with monetary value.
Preparation is Key
According to the Law Society, people need to leave clear instructions about what should happen to their online accounts after their death.
Law Society president Nicholas Fluck said ‘As technology has evolved, so has the way we store information. Simple things such as photographs, which in the past we could have flicked through in a printed album, are now stored online. By making our wishes clear now, it will be easier for loved ones to recover pictures to cherish and will help with the more practical issues such as online bank accounts.’
Alarming research by YouGov found that 52 per cent of us said no one would be able to access their digital accounts if they died because they had not left any arrangements about what should happen.
Can all digital assets be inherited?
You may be surprised to learn that we do not always own our digital assets. For example, my iTunes account is a digital asset that is non-transferrable. The music and videos that I have purchased are not owned by me. I simply have a licence to access them. This is often typical of music, films and eBooks purchased online. The digital providers currently dictate the rules and are contained in their terms and conditions which you agree to when creating your account.
Terms and conditions vary. It is therefore vital that you are aware of what will happen to the content of each of your online accounts so that you have the opportunity to plan ahead to prevent your digital assets of a sentimental or monetary value being lost, locked or destroyed when you die. Once you have identified what will happen to the content, you can then put in place a strategy that will enable those you leave behind to deal with them.
Making provision in your will
Considering your digital assets should now be an integral part of your estate planning and can be set out in your will. For those digital assets that you do own and you can transfer on death clear instructions can be left.
Gary Rycroft, chair of the Law Society’s digital-assets working group advises that we should all have a will and include provisions for digital assets to ensure that our wishes are carried out after death. It is important to make a digital directory that contains details of all of your online assets, social media accounts, logins and passwords, and keep it updated.
Then of course there is the popular world of social media. Whilst this has not been a burning issue in estate planning as of yet; as younger generations start to look at planning for the future, it will become more relevant. I think I will leave “What happens to my Facebook account and other social media when I die?” for my next blog instalment.