We are living in an increasingly digital world. Whether it is online banking, social media accounts or photographs stored in the Cloud, our digital assets are becoming part of everyday life for many of us.
A key question for probate practitioners is what happens to a person’s digital assets after they die? And also, how can executors access key information about assets that have no paper trail?
An increasing demand for legal guidance
According to a recent research project carried out by the Society for Trusts and Estates Practitioners (STEP) and the Cloud Legal Project, demand for legal advice on digital assets is already increasing. One fifth of the practitioners surveyed said they had to deal with questions about digital assets at least once a month, and 90% of survey participants said they expect demand for this advice to increase significantly in the future.
The key point to come out of this report was the need for action by professional bodies such as STEP, together with governments and service providers globally. It will take a collaborative effort to highlight the issues experienced by practitioners and personal representatives and to come up with effective solutions for accessing digital assets on death.
The difficulties of accessing digital assets
The first step in administering an estate is to identify and value the deceased’s assets and liabilities. The traditional way to do this is to gather paperwork from the deceased’s home to identify their bank accounts, credit cards, investments and other cash assets. In today’s digital world, many people choose to manage these accounts online, either on a computer or via a smartphone app.
Additionally, many people now opt out of receiving paper statements and instead receive them by email or view them on an app. This means identifying these assets is going to become significantly more difficult and time consuming for Executors, and there is going to be a much greater reliance on access to the deceased’s email accounts.
We are all actively encouraged to keep our passwords and PIN numbers safe and not write them down or share them with anyone. These practices are essential to keep our digital assets secure during our lifetime, but what about when we pass away? How can we ensure that our Executors can access our online accounts when we are no longer here to provide this crucial information?
One of the issues highlighted by the STEP survey was that email accounts are often managed by cloud providers who do not currently have straightforward procedures in place for personal representatives to access data stored in the cloud, and the standard terms of contracts for consumer cloud services do not address what happens to a customer’s accounts and data when they pass away. There is a need for greater collaboration between professional bodies and cloud providers to find a solution to this issue.
A challenge that isn’t going away
It is clear that in our modern digital world there is going to be a greater importance placed on estate planning, and practitioners will need to be prepared for a much higher demand for advice on how clients can effectively plan for their digital assets. The participants of the STEP survey were asked what advice they would give to clients who came to them for estate planning advice on digital assets, and over 70% said they would advise clients to express their preferences regarding their digital assets in a written document such as a letter of wishes to be stored with their Will. Many mentioned concerns about confidential information such as passwords being included in the Will itself, because it would eventually become a public document.
The final point of the survey was the need for law reform in the future to help with estate planning and estate administration for digital assets. Personal representatives need to be clear on their rights to access digitally held data and information that will enable them to effectively carry out their role. It is also clear that estate practitioners will need information, education and training to prepare for a future in which digital assets will be an everyday part of estate administration work.
How Moore Barlow can help
Here at Moore Barlow, we can offer advice and assistance with all aspects of estate planning and administration of estates. If you have any questions about this or any other topic and require legal advice, please contact our expert team today.