What happens to digital assets on death?
We are sending a staggering amount of personal media into the cloud and increasing proportion of our assets are managed online. We often don't have a plan of what will happen with it when we die?
Inheritance law governing physical assets doesn't always provide an answer to this issue. Often contents uploaded online is subject to a licence agreement with the applicable provider, which in turn may be governed by the law of a different jurisdiction.
One example is Facebook and its hold on assets of sentimental value. Users often count on Facebook to be their photo album and family documentarian. The problem occurs when the user has died and their family would like to download the content and delete the account. Facebook secured the right to store and display the content of an account even after the user has died. Facebook gives two options to the family and friends of the deceased. First, is an option to "memorialise" the page of the deceased. This essentially freezes the page in time and doesn't allow any changes or downloads. The second option is to ask Facebook to take the page down and lose all images and videos in the process.
Facebook is doing that because they have a licence over the content until the account is shut down or until that content is taken down. From Facebook's standpoint, the more accounts are memorialised, the more data they can monetise. From the family's standpoint, the solutions offered are often inadequate, but there is little that they can do.
The situation with digital assets of financial value is even more complicated. Online trading platforms, PayPal accounts, Bitcoin accounts, Amazon Prime and even gaming accounts with cash holdings all have different rules regarding the death of the account holder. These platforms are highly encrypted and access is password restricted.
Additionally, executors may well be unaware that the deceased holds any e-currency or investments online. As a result, when a person dies their virtual funds would still exist but be inaccessible and lost forever, causing financial loss to their estate.
So what can be done to save loved ones all this hassle?
Writing a list of all cloud services and devices is a simple solution. This could be a manually maintained list which could be printed out and kept with your Will or in a safety deposit box. There are also online versions of password-protected safety deposit boxes. This information needs to be kept very secure. You shouldn't record such important access information in your Will as this becomes a public document upon application for the Grant of Probate and as such your security would be severely compromised.
It is equally important to think about what you want to happen to those assets when you pass away. Some assets could be transferred to loved ones, other preserved for their benefit and some assets should simply be deleted. It is also a good idea to regularly download digital records.
The digitalisation of our daily lives offers many opportunities for growth and profit and it is important to ensure that your estate planning covers all your assets – digital and physical so that if the worst were to happen, you have the peace of mind in knowing your personal matters are taken care of and your loved ones will be looked after.
For more information or to receive our Guide for Client on Digital Assets (including an inventory list to help you record your digital assets), please contact Anna Boucher at email@example.com.