Rathbones Review written by solicitors Matthew Barnett and Jessica Brittain from Edwin Coe LLP’s private client team explain in a recent article ‘what a digital legacy is’ and ‘how to account for it in a Will.’
The firm said that English succession law has struggled to keep pace with people’s ever-increasing dependence on the online world, and that there were legal and tax implications that needed to be taken into consideration.
Relying on Mobile phones
The global lockdown has accelerated the trend, pushing greater numbers of people towards reliance on their phones and computers. As a result, more music, photos and documents are stored in the cloud or online and shared through social media, and the lawyers point to growing unease about what happens to such collections when people die.
A 2019 YouGov survey found that only 7 percent of people wanted their social media accounts to remain active after they died. One estimate predicts that by 2100, some 4.9 billion accounts on Facebook alone could be from ‘dead users’.
Many sentimental items such as family photographs are now stored in the cloud, which can cause difficulties for estate executors or administrators and family members when someone dies.
No consistency
A 2017 Law Commission report Making a Will identified that there was no consistency of approach to the problem in the terms and conditions of cloud service providers.
In addition, there is no formal definition of what counts as a digital asset, though Barnett and Brittain divide them into three categories.
1. Assets with financial value, such as online bank accounts, shopping, betting, PayPal, cryptocurrencies, investment trading accounts, etc.
2. Assets with social value, such as Facebook, Twitter and Instagram accounts
3. Assets with sentimental value, such as digital photos, an iTunes library and YouTube account.
In general, digital assets that have financial value are legally owned by the individual and can be passed on to the intended heirs of an estate. But their value must be calculated and included in the valuing of a Will to determine if any inheritance tax is due.
For assets without value, such as personal photos stored on a phone, tablet or computer, the situation is not as clear—though those photos do fall within an estate.
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