Our world is becoming ever more digital and the internet has created a new type of property - digital assets. But cyberspace has no physical boundaries so legal rights have to be redefined in relation to matter such as ownership of digital assets, their transferability and the duration of ownership.
Our digital assets are estimated to be worth some £25 billion and this is only set to increase as more of our lives are captured and stored in digital form. As a result we now also have to consider our digital footprint in the light of incapacity during our lifetimes and, inevitably, death.
The question is: have you considered your digital legacy?
What is a digital asset?
Surprisingly, there is currently no legislative definition of what constitutes a "digital asset" in the UK but it is understood to be any information that exists in digital form - whether online or on a storage device.
Your digital legacy
Our personal digital assets include photos, online accounts, social media profiles, domain names and fiat currencies such as Linden dollars and Bitcoin. Just consider how many text messages you send each day; how many photos do you take but never print? They are all held in cyberspace and at some point will need to be accessed.
If you would like your digital assets to be protected and you want to generate maximum financial return for your beneficiaries then you need to consider such assets in estate planning when preparing or updating your will.
However, it is not just our personal digital data we have to be concerned about. If you own a business you also need to consider its digital footprint, from online stores and mailing lists to company email accounts. It can be disastrous for a business when, for instance, accounts are frozen upon death to prevent fraud and no-one in the business can access them.
Making provisions for your digital assets is a modern day issue but it should be considered as important as making provisions for your tangible assets, such as your home and personal possessions.
Safeguarding your digital legacy
How do you provide access for your attorney (during your lifetime) and/or personal representative (upon death) to your digital assets? You should not assume that friends and family know what digital assets you have. Quite frankly, it can be a nightmare to trace digital assets when there's no paper trail and no obvious place to start.
Digital assets need to be valued in the same way that tangible assets are. Gaming assets and intellectual property may require a specialist valuer. In your will you may wish to choose an executor purely to administer your digital assets - especially if you have business assets and you want to appoint someone with technical abilities and/or you wish to limit who has access to your data.
Your digital inventory
It's important to take an inventory of your digital assets to make it easier for your attorney or personal representative to locate your accounts. You can also leave clear instructions in a letter of wishes as to how you would like certain matters to be dealt with, such as specifying "delete my Twitter account". This should save time and money, and most importantly it should prevent sentimental and valuable material being lost forever.
However, such a list must be kept safe and it is recommended that this kind of information is encrypted. We do not recommend listing passwords and pins. There are password management companies that can store such data on your behalf.
The other issue when making provision for your digital legacy is that every provider seems to have different rules on how an attorney or personal representative may access your digital data. This is because no uniform legal procedures are yet in place and so it is down to the individual providers to determine what occurs. It is hoped that this will be addressed in future legislation.
In the meantime, some online providers such as Facebook have brought in procedures such as the "Legacy Contract" feature so that you can nominate someone to have access to your account upon death. However, some digital assets are licensed only to individuals and the contract ends upon death. These include Kindle content and Apple Music. This means these assets can't be passed on to a beneficiary in the same way that a collection of CDs or books can.
A word of warning…
It is important that an attorney or personal representative does not access any of your digital assets before checking the terms of service and sending a certified copy of the power of attorney or grant of probate to the provider. A failure to do so may be considered an offence under the Computer Misuse Act 1990. So even if an attorney or personal representative has your password they must be very careful not to break the law.
You also need to consider cross-border issues - what may be permitted in one country may not be in another. The USA, Canada and Australia all have legislation making it an offence to gain unauthorised access to digital assets.
Five practical things you can do now to protect your digital legacy
- Make a list of your digital assets;
- Decide on a safe place to store this information;
- If you own a business, review its digital profile;
- Make or update your will and/or power of attorney to include your digital assets;
- Contact a lawyer for advice.
Copyright © 2017 Natalie Payne, assistant solicitor at London law firm Mackrell Turner Garrett.