Over recent years, rapid growth in internet usage has resulted in an increasing volume of individual personal and financial data being stored in a digital format.
Yet, when people come to put their affairs in order, they often overlook the existence of their digital footprint. After death, this can cause untold difficulties for the deceased’s personal representatives, who are under a duty to make a full and thorough investigation of the deceased’s assets and liabilities, and to present a complete picture of the deceased’s financial affairs to both HMRC and the beneficiaries of the estate.
DIGITAL ASSETS AND LIABILITIES
Digital assets may include traditional assets such as bank and building society accounts, which are accessible only online. They may also include stocks and shares managed via an internet portal. Without hard copy records of those accounts, personal representatives may have difficulties establishing the existence of such assets. Other examples of digital assets might include valuable domain names, together with credit balances on websites such as PayPal or even winnings from online gambling sites. It will also be necessary for the personal representatives to consider whether the deceased had any internet business interests, for example an eBay trading account. Personal representatives will need to be aware of all of these in order to administer the estate properly.
Aside from identifying the existence of digital assets, personal representatives will also need to know how to access them. Often, this will be by way of a personal login and a password. This can present a further barrier to personal representatives trying to gather information required for probate purposes. Moreover, the personal representatives are under a duty to secure all parts of the deceased person’s estate. It is not uncommon for passwords to be shared between couples or close friends, and the personal representatives therefore need to be alive to the possibility of unauthorised account access by such persons. Where the deceased has furnished his personal representatives with the necessary login details, they may access such accounts in the wake of the death, in order to change the access settings and prevent potential security breaches.
Turning to liabilities, it is becoming increasingly common for utility and other bills to be accessible only via an online account. Again, it is important that the personal representatives are aware of such accounts, and that they have the means of accessing them. This may be even more critical where there is a surviving spouse with little or no knowledge of the household finances.
OTHER DIGITAL COLLATERAL
Of course, it is not only data with a monetary value that requires consideration. By default, most digital information is considered to be property of the estate, even if it has no intrinsic pecuniary value. Items of sentimental value, such as photographs, social networking profiles, and email accounts, may be of particular interest to the deceased’s relatives. It may be that social media sites provide an unwelcome reminder of the deceased’s passing. Alternatively, relatives may seek to recover photographs and other mementos as a means of preserving the deceased’s memory. Either way, the question of accessing or controlling the data arises.
It is also important to note that, while many service providers have explicit policies on what will happen when an individual dies, others do not. Many online providers (such as iTunes) have end user licence agreements that restrict access to digital assets to the named individual and provide that they cannot be passed on to a third party.
KEEPING A RECORD
In this context, the importance of keeping accurate records of all digital data can be seen. Ideally, personal representatives will require not only a list of the accounts that are in existence, but also a note of the relevant access details. Including such details in a Will is not a solution since a Will becomes public after it has been admitted to probate. A more satisfactory solution would be to keep a separate list of all relevant details, and to consider depositing this with a bank or solicitor, or storing it in a safe. The importance of keeping this list up-to-date cannot be stressed enough – and of course this presents additional problems given that we are advised to change passwords frequently for security reasons. The format of such a list is a matter of personal choice; whilst some people may prefer a sealed envelope, others would feel more comfortable storing such information on a CD or data stick (perhaps with appropriate password protections). Further, there are online organisations offering secure storage of login and password details – so that if personal representatives can access that storage system they can access full details.
This is a problem which is a relatively new one, and it may be that further solutions will emerge. In the meantime, it is something to be aware of for everyone seeking to settle their affairs, so that one’s digital legacy is not lost forever.
If you have any queries please telephone or email your usual contact at Stevens & Bolton LLP.
Please note that the information in this leaflet is necessarily brief and is not intended to be an exhaustive statement of the law or relied upon as legal advice. It is essential that professional advice is sought before any decision is taken.
Stevens & Bolton LLP is not authorised by the Financial Services Authority (FSA) but we are able in certain circumstances to offer a limited range of investment services to our clients because we are members of the Law Society. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.