How many of your clients know what would happen to their digital assets after death? Is it something they’ve ever thought about? Would many even know what was meant by a digital asset?
These were among the questions addressed by Head of the Trusts and Estates Team at Talbots Solicitors, Ian Bond, whilst speaking at the annual national Solicitors for the Elderly conference held last month at the British Library.
Looking at both the practical and legal aspects of a digital demise Ian said: “The difficulty for the private client practitioner is that the current laws, which have covered traditional property, contracts and estate issues, do not adequately provide the necessary guidance and structure to address digital assets.”
It is hoped that the reforms currently under consideration will include some further guidance on these issues when a draft Bill is prepared by early 2019. In the meantime, Ian suggested that practitioners should consider asking some basic questions around digital assets when meeting with PRs to discuss instructions.
Ask the right questions
Advisers should try and establish what digital assets exist and need to be administered. This could include the obvious such as online bank accounts, online share trading accounts and online auction accounts (such as ebay) along with the not-so-obvious such as social networking sites and other media, domain names and websites, email accounts, online gambling accounts, digital music, and cryptocurrencies (such as BitCoin).
Should you appoint a ‘digital executor’?
Ian Bond said: “Traditionally practitioners have encouraged will-making clients to select executors who they are confident will uphold their written wishes. However, the ‘traditional choice’ of executor might not be appropriate to protect various digital assets.” Ian said that he had begun to see ‘digital executors’ appear in wills and warned that, whilst this is legally binding in some States of America it is not binding or enforceable in England and Wales. It may be sufficient to appoint an executor who is familiar with digital platforms alongside another executor who may not be as confident in this areas.
“In England and Wales it is possible to appoint separate executors to deal only with certain assets,” said Ian. “Although I am not aware of this happening, it is possible to appoint separate executors to deal with different areas of the estate (for example as often happen with literary assets) and so it would be possible to appoint separate digital executors. You would then get two grants: one limited to the digital assets and the other ‘save and except’ the digital assets.”
Duty to investigate
Of course in practice, it can be very difficult for PRs to present the assets of the estate and deal with them – including taxation issues and duties to the beneficiaries – properly. A great deal of detective work can be required; especially if there is no digital assets log to refer to.
Ian advises that we should keep in mind the following tips
* Be fully aware that any online bank accounts must be included in the estate and therefore raise this with the deceased’s family, PRs etc so that they can discuss this further
* Look through the deceased’s papers as a statement or tax certificate will identify online bank accounts and the providers can then be notified in the usual way.
* Investigate to see if the deceased made a note of passwords or additional assets within their will. Did they leave a digital legacy?
* When writing to financial institutions, especially banks, it would be worth asking them if the deceased had only online bank accounts.
* If there are online businesses, it is worth asking the deceased’s accountant or financial adviser what digital assets and information they are aware of, particularly the financial value and owners of such businesses. Again paperwork should hopefully be found.
* Searching through the deceased’s records on their computer could also highlight digital assets.
Ian Bond is the current Chair of the Law Society’s Wills & Equity committee and has contributed a number of chapters to the Law Society’s Probate Practitioner’s Handbook (including a chapter on Digital Assets for the 8th edition) as well as being a member of STEP.
2 Responses
Great article, but I am a bit confused about the digital executor section. It starts off:
“Ian said that he had begun to see ‘digital executors’ appear in wills and warned that, whilst this is legally binding in some States of America it is not binding or enforceable in England and Wales.”
But then the next paragraph seems to contradict this:
“In England and Wales it is possible to appoint separate executors to deal only with certain assets,” said Ian. “Although I am not aware of this happening, it is possible to appoint separate executors to deal with different areas of the estate (for example as often happen with literary assets) and so it would be possible to appoint separate digital executors. You would then get two grants: one limited to the digital assets and the other ‘save and except’ the digital assets.”
Please could we have some clarification on this? Is an appointment of a ‘digital executor’ legally binding or not?