The value of our online lives is becoming immeasurable, yet few people are recording or protecting their digital assets.
Whether the financial value of investments or the emotional value of family photos, if there is no arrangement in place to hand on passwords, list accounts or give authority for access, there is the chance of losing assets forever when someone dies. And problems can arise even while people are alive and still in a position to access online accounts, whether they are for record-keeping, storage or financial purposes.
Many imagine that securing content in the cloud is a safer option than a printed photograph album or other physical or user-owned storage options, but it was recently reported that Google had revised its storage policies, allowing the online giant to delete data when it has not been accessed in the previous two years.
Similarly, a review of dormant account practices by HSBC found the bank had put £1.5bn of customers’ cash out of reach in frozen accounts, after just 12 months inactivity for current accounts, and 24 months for savings - one of the shortest periods among the big four UK banks. And even when accounts were reactivated, the bank was re-freezing after just four weeks without regular use. Around a third of the dormant accounts were held by savers aged over 65, with the report highlighting the risk for elderly customers who may have “lost track of their account, forgotten the details and be suffering detriment from lack of access to their savings”. Most surprisingly, more than half of dormant funds belonged to customers who had active accounts with HSBC, meaning the bank had a potential route to re-connect such accounts.
Such problems are likely to be compounded when someone has died without taking steps to secure their digital assets and provide the necessary information to give authority and access. One recent case involved widow Rachel Thompson’s fight to win access to her late husband’s Apple iCloud account, which contained thousands of family photographs and hundreds of videos. Apple said that the right to access the content ended with the death of the user, unless provided otherwise in law, meaning that access could only be granted by court order. While Rachel Thompson was successful in obtaining that, the court case took three years and cost many thousands of pounds.
Problems may also arise where it is not clear who owns the digital content as some accounts may involve granting the user a licence to use services, such as streaming and downloading online music and media, so a purchased library of music may not be transferable in the same way as a physical vinyl or CD music collection.
Such examples demonstrate the increasing importance of ensuring that digital assets remain secure and accessible to those who should benefit. Digital assets include all content, accounts and files created and stored in a digital form, whether online, in the cloud, or on a computer or smartphone. These assets may have great financial or sentimental value. And assets with a tangible financial value are not limited to online bank or investment accounts, and could include cryptocurrency, online betting accounts, or internet payment accounts such as PayPal and affiliate accounts that generate advertising revenue.
Social media accounts, personal photographs and other personal records and correspondence may be more sentimental in value, but there may be others, such as domain names or blogs, which have a commercial re-sale value.
It’s worth getting your digital assets in order, as it’s good business and household management to have a record of exactly what you own, whether intellectual property such as a domain or blog, an online bank account, or a record of family history. If you have a will or plan to make one, it’s something to discuss with your advisor and to let executors know. While physical assets are usually quite easy to identify, assets held online can be overlooked, particularly with the shift towards digital statements of account, so there is likely to be no paper trail of any sort.
It’s also worth considering when appointing anyone to help in the management of your interests under a power of attorney, such as a Lasting Power of Attorney (LPA) for financial affairs. It may require special arrangements be in place for attorneys to manage digital accounts and assets.
Four steps to secure your digital life
- List everything: Make a list of all your assets and accounts and keep it up to date. A sealed copy can be provided for secure storage by your lawyer with your will or power of attorney. Personal information should never be included in the will or power of attorney itself.
- Secure passwords: Record and regularly update all usernames, passwords, and the email address associated with the account. Store the details using one of the password-securing providers or keep a physical list safe and separate from the full list of accounts.
- Check the user licence: Find out what happens to an account on death, whether it is transferable, and decide what you wish your executors to do, including whether it should be deleted and who may or may not access it. Where legacy arrangements can be specified with a provider, do so.
- Grant authority: Make sure your attorneys or executors have the authority they need to access and manage your digital assets by putting this in writing, having it witnessed, and storing securely.
If you would like to find out more about setting up Lasting Powers of Attorney as well as how you can protect your family assets against inheritance tax and plan for long term care, register for our free Zoom webinar. Click here for more details and how to receive a Zoom link.