The importance of digital assets when making a Will

The internet can be a wonderful place for people to create and build new things; from publishing your own e-books to setting up your own business, creating new digital assets that can be bought, sold and owned like more traditional assets.  A recent case, however, has cast a light on the ways in which the law is still to catch up with lives led increasingly online and the difficulties that this can cause when you die.

In July 2015, Matthew Thompson died leaving behind his wife, Rachel, and their young daughter, Matilda. Wanting their daughter to have something to remember her father by, Mrs Thompson contacted Apple to request that they release the more than 5,000 photos and videos of their family that her husband had taken over the years and which were stored on the tech giant’s servers. The photos and videos were of great sentimental value to Mrs Thompson, particularly given that some were of her own father, who died around 18 months after her husband. Apple, however, refused, saying that as Mr Thompson had not specified who he wanted to have access to his account after his death they would require a court order before they would release any of the photos or videos.

Why would Apple turn down such an apparently simple request? The answer lies in the way that digital assets are treated under the law.

Digital assets, such as photographs and videos, are treated differently to physical objects when it comes to leaving them to someone else when you die. Unlike a photograph album, which you can in a very literal sense pass on to someone else, the physical presence  of a digital asset, such as the data file of a digital photograph stored on a device such as a smartphone or PC, is not regarded as an asset that you can leave to someone in your Will.

What you can leave to someone else, however, are the digital property rights associated with that digital asset, such as the copyright. Where they are stored on a physical device, such as a laptop, this distinction may seem unimportant as if you have the laptop you will have possession of the data files for those digital assets. However, where the data files are stored remotely on servers operated by companies such as Google or Facebook, this can lead to difficulties.

Access to services like Facebook is usually governed by the terms of a user agreement between the account holder and the company. The issue with this from the point of view of dealing with a deceased person’s estate is that the user agreement is between the user and the company, and so when the user dies, the right to access the account may die with them.

To make matters even more complicated, different companies have chosen to deal with the issue of access in different ways. The terms of service for Apple’s iCloud, for example, specifically state that accounts are non-transferrable and that the content of an account will be terminated on death. Google and Facebook allow users to nominate someone to have access to their accounts after their death, while Instagram does not grant its users the ability to do this, but it does allow family members to request that an account is ‘memorialised’, meaning that the account cannot be logged into or altered, but the content will remain visible.

All of this can lead to a rather bizarre situation where a deceased’s next of kin can have the right to the digital property rights property in a digital asset stored in the cloud, but no right to access the data files themselves.

Fortunately for Mrs Thompson, a central London court ordered Apple to release the photos and videos taken by her late husband, albeit this came some three years after his death and at great financial and personal cost.

To put grieving families through such a lengthy and arduous process in order to get access to their family photographs seems ridiculous and hopefully the law will eventually be reformed to allow digital assets to be dealt with more simply after death. For the time being, however, there are steps that you can take to help secure your digital assets for the next generation:

1. Create a schedule of where your digital assets are stored including logins if files are stored in the cloud, as this will help your executors track down all of your assets.

2. Nominate someone to deal with your account after you die if you have digital files stored remotely with a company that allows you to do so.

3. Include a clause in your Will that specifically deals with your digital property rights in much the same way as you might include a clause that deals with who is to inherit your personal possessions or your property.

4. Nominate a digital executor to deal with your digital assets if you have particularly valuable or significant digital assets that you do not think that the executors of the rest of your estate would be able to deal with. For example, winding up an online-only business might require people with specialised knowledge to deal with effectively.

If you are concerned about how your digital assets will be dealt with after you die, please contact a member of our Succession and Tax team, who will be happy to help.