Digital assets: a growing problem

Are your clients mindful of their digital assets? Are those assets included in their wills? If not, there is a risk of their loved ones being unable to access them on their death.

The Law Society recently published the results of a survey of members of the public which revealed that virtually no one had a will that included any digital assets. The Society commissioned a survey of 1,000 individuals last June, and of those who said they had a will – 93 per cent had not included any digital assets. Only a quarter were aware of what happens to those digital assets when they die; just 7 per cent fully understand and 19 per cent have some understanding.

Covid-19 has seen two significant developments that private client lawyers must bear in mind. First, there has been a significant uptick in wills instructions as people recognise their own mortality and the need to protect both their loved ones and their wealth. Second, we are all invariably operating online to a much greater extent that we were a year ago because of the lockdown restrictions imposed upon us.

Virtually all of us have a greater online presence, and therefore an increase in the number of digital assets we own.

Lack of definition

There is no legal definition of what amounts to a digital asset. This is a potential problem, though in most cases it will be obvious: social media accounts, online bank accounts, email accounts, and cloud stored documents such as Dropbox and photos. There are Spotify accounts, Kindle ebook accounts and eBay shops; virtual currency and HMRC tax accounts. The list goes on.

Not all digital assets, of course, have financial value – the sentimental value of some digital assets can be far greater to the deceased’s family than online bank accounts, for example.

As Law Society president David Greene says, technology is “a huge part of modern life… Photos, social media accounts and emails from loved ones are often just as treasured as physical possessions”.

He highlights that with so many social media platforms created even just in the last few decades, it is easy to overlook digital assets when making a will. The risk is that family members will be unable to access them after the testator’s death. This could then delay probate if, for instance, online bank or building society accounts are not accessible.

We’re not aware of any reported cases in the UK on the issue, but a US ruling in 2019 gives some initial indication of how the courts might approach it. The deceased was killed in an accident and Apple would not allow access to family photos held in his iCloud account without a court order. The will did not include authorisation to access the account. The judge ordered Apple to allow access to those photos.

List digital assets

It is vital for practitioners to ensure wills clients are encouraged to maintain a detailed inventory of all online accounts and other digital assets, including user names and passwords. Clients need to consider who should be given the responsibility of accessing and managing their digital assets. Who do they wish to inherit those assets on death; and do you need to consider the possibility of any trusts of online banking accounts?

Once the will is executed, clients should then be reminded to keep records of any changes to the user names and passwords and add any new digital assets to the list, keeping this with a copy of the will.

If they don’t already do so, practitioners should regularly remind clients to review and update their wills if any circumstances change. Note that the Law Society’s research also showed just 29 per cent of people had an up-to-date will.


Posted on 15.01.21