Protect your digital assets after death
How to protect your digital assets once you are gone.
Our lives are moving online more and more each day as we back up photos and communications to the cloud. Some people are going as far as using online money with cryptocurrency.
But how many of us have thought about where these assets go after our death? Who has the rights to access them? And how do we prevent them from getting lost once we have gone?
What are digital assets?
Before we are even able to think about what we need to do to protect our digital assets, we need to consider if our digital assets are actually assets.
The term “digital asset” can be hard to define as it is often not referring to an “asset” in the strictest sense of the word and is instead referring to “information”.
This causes issues because assets and information are treated very differently on death, so it is important to keep the distinction in mind when considering your estate planning.
Because assets and information are treated so differently, if you state in your will what you would like to happen to these assets, it is never guaranteed that these wishes will be followed.
Why are traditional assets easier to manage?
On death, personal representatives (PRs) can deal with your assets under long-established legal principles. As long as they have a grant of representation that they can provide to the custodian (e.g., a bank), they can handle and distribute your assets according to your will.
More often than not, information held by custodians tends to be provided, without any problems, along with the assets themselves. However, “pure” information – that is information that does not go with an asset – can be harder to get, and you are likely to need some legal ruling or a legitimate reason for the information to be shared.
Why are digital assets not dealt with in the same way?
Digital assets, such as cryptocurrencies, can blur the distinction between information and asset as the asset can only be passed on through the sharing of information. For example, for a beneficiary to inherit any cryptocurrency (the asset) they will need to inherit the pass key (the information). To complicate matters further, there is often not a custodian (such as a bank) that the PR can wave a grant to in order to gain access to the assets.
To make sure your PRs can access these digital assets, you will need to share the information with them, whether that be in a sealed letter for them to open on your passing or telling them during your lifetime.
Who can access your photos?
Similar issues are faced when a loved one is trying to access sentimental assets which are kept online, such as emails or photos.
From recent cases where someone has gone to court to gain a loved one’s digital assets, we can see that some service providers view cloud-stored photos or emails etc. as information, not assets; therefore, they believe that PRs have no legal right to access them, leaving us all to rely on the terms and conditions we agree to when signing up to the service.
Of course, there is a simple solution: share your passwords with your PR either in written or verbal form. But this provides a security risk, not to mention that it is a breach of contract.
But it’s not all doom and gloom as some providers are providing a solution to this. Google have added an Inactive Account Manager feature, where the account holder can nominate an individual to have limited access to the data on the holder’s death. If you make use of this feature though, it is imperative that you keep it up to date with any changes made in your will.
What do you need to do?
When you are estate planning, you cannot assume that digital assets will be treated in the same way as your shares, bank accounts and property. Thanks to the digital era being in its infancy, we are yet to develop processes to deal with claiming digital assets.
Proof that your PR has entitlement to your assets and information is only useful where there is a custodian, which is not the case with cryptocurrency, and where there is a custodian, they are unlikely to grant access to the PR.
And despite our lives becoming increasingly more reliant on digital technology, the problems faced after someone dies does not seem to be a priority for the government to address.
But this doesn’t mean that you should disregard your digital assets when planning for the future.
While we wait for the government to introduce legislation to regulate the procedures for claiming digital information and assets after death, it is down to the individual and their legal advisers to put a suitable plan in place. So, it is highly recommended that you include them in your will – even in the knowledge that the desired results may not be achieved.