Making a Will digital: digital assets and key points to consider when drafting your Will

So, what are digital assets?

This is a strangely difficult question to answer as there is not a strict legal definition. In general terms, they are “possessions” that you can access on a digital device such as a laptop, personal computer, mobile or tablet. This might also be under agreement with a third party such as iTunes. It is therefore very important that digital assets and access to those digital assets are considered when making a Will.

Writing this blog has prompted me to think about my own digital footprint. It is surprising how many digital assets I have accumulated in a relatively short period and how ubiquitous many of these are to modern life. It is safe to assume that I will have many more digital assets before I die, so I thought now was a good time to overhaul my planning for the future where these assets are concerned.

So, what type of digital assets should I consider when making my Will?

1. Digital assets with a financial value

These can be easily identified and include things like online bank accounts, online stocks and share accounts, PayPal, digital currency and even gaming accounts. They can also include things like photographs, air miles, domain names or intellectual property rights.

These types of assets are owned by you (rather than licensed) and will usually form part of your estate and will therefore pass under the terms of your Will. It is therefore very important to check whether the asset does form part of your estate and if they do, to consider whether they need to be left to a particular person or, in the case of more complex assets such as intellectual property, if it would be more appropriate to appoint a professional experienced in such matters to manage the asset.

It is important to ensure that you have left details of your digital assets and online accounts for your executors to easily find after your death. Many of these accounts operate by an App and correspondence is uploaded, with perhaps only occasional email notifications. Without clear direction and guidance, valuable assets could be missed.

Let’s consider a practical example. My household has a Tesco Clubcard that is used on a very regular basis. The points earned are managed by an online account and so they are digital assets of my estate. What happens to them on my death is something I will need to consider, as these points can mount up quickly and can become valuable.

Tesco’s terms and conditions state that it is possible for a family member to inherit the points/vouchers if I die and they can contact Tesco directly. This means that the “asset” will pass under the terms of my Will. If not left specifically to an individual, the value will form part of my residuary estate.

2. Subscription accounts

These accounts can be used under license by the user for a subscription fee. They do not have any specific financial value, nor will they necessarily pass by your Will. Access is dependent on the terms and conditions of the particular site. It is therefore very important that the terms and conditions are checked to see what happens on death, but it is likely that due to the nature of this type of account, any rights to access your account will cease with your death.

I have a subscription with Spotify, which is linked to my mobile phone contract and paid using one of my online bank accounts. This gives you a flavour as to how tied in these assets can be. Focusing solely on the Spotify account, the control of the music rests with Spotify and not me. I do not own any of the music but merely have a license to use it during my lifetime. This means that when I die, the licence comes to an end. My personal representatives will therefore not be able to access the music. Additionally, if I had a family based subscription, it is likely that my surviving family would not be able to access the account (if held in my name) after my death.

3. Digital assets with a sentimental value

Photographs and videos can be taken in seconds nowadays and all of us will have a lot of these images stored on computers, mobile phones and in the cloud. In the majority of cases, the photographs and videos will have a sentimental rather than financial value and will only be of interest to family and friends.

Items with sentimental value can often be the cause of rifts between families after a loved one has died. It is therefore very important to consider whether these types of assets should be left as a specific gift in your Will or as part of a more general gift of personal possessions.

Careful consideration should also be given to how your photographs and videos are stored. For example, I own an iCloud account and in preparation for this article, checked their terms and conditions. I was very surprised to find out that they state “Unless otherwise required by law, you agree that your Account is non-transferable and that any rights to your Apple ID or Content within your Account terminate upon your death. Upon receipt of a copy of a death certificate your Account may be terminated and all Content within your Account deleted”.

It would seem that I merely have a license to use iCloud as storage during my lifetime and do not retain ownership of the content. I will therefore be backing up my most treasured photographs and videos to a local hard drive to ensure that my family and loved ones have access to these digital assets after I die. If I leave that hard drive to a specific family member, but wish to ensure that they share the contents with others in my family, I will need to make this clear to avoid any unnecessary arguments following my death. If I don’t leave it as a specific gift, the device will form part of my chattels and pass under my residuary estate.

In some cases, your photographs or videos may have a valuable copyright that attaches to them e.g. professional photographs or a YouTube account with numerous subscribers and an income stream from advertising which may well continue after you are gone. If this is the case, you may need to give serious thought as to whether this is left as a separate gift in your Will and whether a separate executor with the appropriate experience be appointed to administer such assets. Again, the terms and conditions of any linked account needs to be checked to ensure that they do form part of your estate after you die.

4. Crypto-currency

This is a very new form of digital asset and is fast becoming very popular. I don’t own any crypto-currency myself, but anyone who does will need to think carefully about who receives the asset under the terms of their Will and how their executors access it.

Crypto-currency is usually stored in digital wallets secured by private keys. The details of both need to be noted down and secured safely, as your executors will be unable to access the currency without these. If these details are not available for your executors, then there is no alternative way to access the asset. It is important to let your executors know where they will be able to find this information (but not the information itself) following your death.

A letter stored with your Will or in a safe place with other important papers in your home of which your executors and/or your family are aware would be one way of doing this. Leaving the crypto-currency as a specific gift in my Will would act as an alert to your executors of the potential existence of the asset, but they will still need the access information to be readily available.

As this is a complex area, you may also wish to give serious consideration to appointing someone with suitable experience to deal specifically with this type of asset.

Who can access my digital assets if I lose capacity?

I have focused on digital assets and how they should be dealt by way of a Will on death, but what happens if I am unable to manage them during my lifetime? In addition to a Will, serious consideration should be given to the preparation of a Lasting Power of Attorney (LPA). A LPA can be prepared, appointing attorneys to protect your financial and personal interests in such circumstances.

Making a Will digital conclusion

As I have found when investigating my own affairs, there are a number of different types of digital assets which fall under this broad umbrella heading. Depending on the nature of the asset itself and the interest or ownership you had the assets may or may not pass under the terms of your Will (or by the rules of intestacy if you die without making a valid Will).

It is very important to plan early. That means you will need to think carefully about things like your digital asset portfolio; what information you would like your family to have access to following your death; whether the asset forms part of your estate or ends on death; whether the asset needs to be left to someone specifically and who would be best placed to deal with the asset once you have gone.

So much of our lives are now conducted on line now that this is no longer an area that can be ignored as being less important than dealing with other, tangible assets.

If you need legal advice on making a Will digital, contact our Succession & Tax team.