Laytons LLP | Digital Assets

Digital assets What happens to yours after death?

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Digital Assets What happens to yours after death?

The rise of the age of the internet is changing the world we live in. People in the UK now spend more time connected to the internet than they do sleeping and statistics show that 89% of adults have accessed the internet within the last 3 months. Despite this, only 7.9% have made plans for their social media accounts after death and many underestimate the importance of digital asset estate planning.

Jessica Maddox

Liz Braude

Trainee Solicitor jessica.maddox@laytons.com +44 (0)161 214 1600

Partner liz.braude@laytons.com +44 (0)161 214 1618

Digital Assets | What happens to yours after death?

It is surprising to note that despite society’s increased reliance upon and use of the internet, the law too seems to be lagging behind when it comes to making provisions for the transfer of digital assets upon death.

There is no definitive legal definition as to what constitutes a digital asset but in general terms it includes any text/media that has been formatted into a binary source that comes with the right to use. Data that does not possess the right to use are not considered assets.

Digital assets can be broadly categorised into two types, the

Then there is intangible personal property, these are the rights

first of which is monetary digital assets, which includes the

associated with the information, but the information itself does

likes of online betting accounts (if in credit), Bitcoin and other

not have the status of property under English law. Finally, there

cryptocurrencies, PayPal accounts and any media which may

are contractual rights, which include digital assets which are

hold value in the world of intellectual property, such as art

the subject of an agreement for use, for example an iTunes

work, websites and domain names etc.

account.

Then there are those digital assets which hold sentimental

The way in which the asset is to be dealt with in the will

value to the deceased’s loved ones, which may include online

therefore depends on the precise nature of the digital asset in

blogs, social media, photos and gaming avatars. Due to the

question.

increasing influence of technology, a person is much more likely to record monumental life events in an online blog

A major issue is knowing which digital assets are capable of

than by writing an autobiography, or send an email rather

passing upon a person’s death. This is a particular problem

than writing a letter. The information is just as valuable to the

when it comes to digital assets which are subject to an

deceased’s family, however the digital nature of the assets

agreement to use. Many assets that we may think we own,

passing can cause complications.

such as the music on our iTunes account, are not owned by us, we merely own the license to use the product. The issue

To complicate matters further, the term digital asset may be

is that each company such as iTunes, Amazon, EBay etc. will

broken down into sub- categories depending on the exact

have individual terms of service which sets out exactly what

nature of the digital asset. These include tangible personal

a customer owns and what rights they have, which may,

property, so this would be the physical asset itself, such as an

in turn, inform what they are able to leave in their will. It is

iPhone or hard drive on which the digital information is stored.

understanding what can and can’t be done under the terms

4 | laytons.com

Digital Assets | What happens to yours after death?

applicable to each platform and making sure a will reflects this

to accessing the deceased person’s personal data. Of course,

which can cause complications if done incorrectly.

many online platforms such as Facebook will be governed by such laws, which may lead to access issues here in the UK.

When it comes to intangible personal property, the issue arises

An example of this would be the recent case of Re Request

out of the definition of personal chattels or possessions used

for Order Requiring Facebook Inc. to Produce Documents and

in a will, in that it may not necessarily include all digital assets.

Things 2012 Case No.: C 12-80171 LHK (PSG) (N.D. Cal. Sep. 20,

This could result in the digital asset falling into the residue of

2012), whereby the family of a teenager who had committed

an estate and not passing in accordance with the wishes of the

suicide wanted access to their Facebook account. The court

testator. A typical clause in a will often adopts the statutory

held that the family had no right to access without any

definition in Section 55(1)(x) of the Administration of Estates

consent from the deceased. Honouring the deceased account

Act 1925. For wills that have been executed prior to 1 October

holder’s right to privacy and balancing this against the family’s

2014, this clause will not include digital assets. For wills

right to control the legacy of the deceased is becoming an

executed after this point, changes to legislation (Inheritance

increasing issue, but if the deceased’s wishes were made

and Trustees’ Powers Act 2014) mean that the definition of

known prior to death, this issue could be avoided entirely.

personal chattels will include all tangible, movable property owned by the testator except business assets, investments and

In terms of ensuring access to online accounts after death,

money. One could argue even this modernised definition does

it is worth noting that writing down a password and leaving

not solve the problem, as it does not stretch the definition

this with a family member or friend may be in breach of the

wide enough to include those assets which would fall within

Computer Misuse Act 1990. Instead, passwords may be stored

the intangible personal property category discussed above.

with an online password management company.

For example, a website used for business purposes which may hold information of monetary value would not be included in

Therefore, to avoid losing access to digital assets after death

this definition. Therefore, the definition contained in the will

and to ensure they end up in the hands of the right person,

may need to be widened or the will could include a separate

it is essential to ensure you have an updated will which takes

legacy of digital assets altogether, depending on the precise

into account any digital assets you may own.

nature of the person’s digital assets.

As discussed above, intangible personal property, that is the rights associated with the information, does not have the status of property under English law and will not pass via a will.

However, such information will be subject to copyright, which protects the author for 70 years from death. After death, the copyright passes to the personal representative administering the estate. However, it may not be this simple in practice.

Privacy and confidentiality can mean service providers are hesitant when it comes to providing information.

Although in the UK the Data Protection Act 1998 and the General Data Protection Regulation due to come into force on 25th May 2018, only governs the protection of data of living individuals, the US has a much stricter policy when it comes laytons.com | 5

Trusts, Estates & Private Client We take a holistic approach to meeting your personal-estate planning needs by getting to know you and the issues relevant to you. We will work with you to craft bespoke solutions for your requirements.

We believe that Private Client is much more than just wills and tax advice, and our specialist lawyers benefit from their rare position operating as an integral part of a leading commercial law firm.

Our Team Alexandra Bartrope

Liz Braude

Ian Burman

Partner alexandra.bartrope@laytons.com +44 (0)20 7842 8051

Partner liz.braude@laytons.com +44 (0)161 214 1618

Partner ian.burman@laytons.com +44 (0)20 7842 8006

Simrun Garcha

Tim Harrison

Gareth Hughes

Solicitor simrun.garcha@laytons.com +44 (0)20 7842 8090

Associate Partner tim.harrison@laytons.com +44 (0)20 7842 8039

Partner gareth.hughes@laytons.com +44 (0)20 7842 8060

Kate Livingston

Helen Woolhouse

Consultant kate.livingston@laytons.com +44 (0)20 7842 8087

Solicitor helen.woolhouse@laytons.com +44 (0)20 7842 8005

This information is offered on the basis that it is a general guide only and not a substitute for legal advice.

We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.

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