Joel Weitzman, Director of The Probate Practice shares some of his thoughts and recent commentary on the growing importance of digital legacies. For more information please visit The Probate Practice or see more of their blogs by clicking here:
Testators are increasingly being advised to leave clear instructions about their ‘digital legacies’ after their death.The latest organisation to stress the importance of online assets is the Law Society. It recommends that people should, at the very least, keep an up-to-date list of all their online accounts, such as email, banking, investments and social networking sites, to make it easier for family members to recover or close them.
It used to be fairly straightforward for Executors to know with which institutions people held bank accounts as bank statements would arrive by post there would be passbooks lying around. These days though many people receive their statements and control their savings accounts electronically so there are no hard copies in the Deceased’s files.
However, the society considers that the list should stop short of recording passwords or PINs. THe Law Society have advised that an executor accessing [the deceased’s] account with these details could be committing a criminal offence under the Computer Misuse Act 1990.
For security purposes passwords should certainly not be listed in a will which will ultimately have to be published.
The term ‘digital legacy’ also encompasses computer game characters in online games like World of Warcraft; music and films; internet domains registered to the deceased; YouTube videos; and Bitcoins, all of which can represent valuable assets. An experienced and wealthy game character takes time to create, and it appears it may be possible to sell such characters online . What such an asset would be worth for inheritance tax purposes on death is unclear as the market in this kind of asset is very new.Similarly, YouTube videos can attract payments from advertisers if the video gets a large number of viewings.Without proper records much of this can be lost on the owner’s death.
The best solution is for the testator to leave a letter of wishes giving executors access to online accounts and stating which accounts should be deleted after death. However, executors are at the mercy of service providers and problems may be encountered if service providers do not recognise the consents given in a Letter of Wishes. Even where records exist, the licensing arrangements attached to some assets – such as Apple’s iTunes – specify that the assets die with the original owner.There may also be jurisdictional issues, However, for the present, setting out express instructions in a letter of wishes gives the user the best chance of enabling his loved ones to inherit his personal digital effects.