There are many reasons why someone should write a Will, but one of the less obvious is to ensure that digital (as well as physical) assets are dealt with correctly.
Making provision for what should happen to digital assets is not an entirely new issue for the legal profession. For the last decade or two, Will specialists have flagged this problem to clients, but often the focus has been on planning for digital assets which were regarded as having more sentimental rather than financial value. The types of digital assets that might traditionally have been considered to have more sentimental value could include digital photographs stored in the cloud, social media accounts and internet and email accounts. For the more tech-savvy reader, you may already be questioning whether these assets can really be considered of sentimental value only. How many people now bank online or make significant sums of money using social media?
So what kind of approach has been taken in the past to advise on digital assets, and what changes are needed in the future? The main thrust of advice for how to plan for these types of assets could be summarised as:
DIY – Here the advisor would flag the potential problem about how digital assets would be accessed after death, but no practical solutions would be offered. If the advice is that the client should “sort it out,” then calling this “advice” is perhaps a bit generous. It might even be negligent to direct a vulnerable elderly client to speak to potential beneficiaries about accessing their digital accounts. What is to stop them using the accounts if a client has provided them with the information to do so? Does the client understand the potential risk they are taking? Have they been able to figure out a way to protect themselves?
Provision after death as part of drafting the Will – This approach might involve having a clause in the Will specifying who is entitled to the digital assets. As Wills become public documents after death, provision for where the secure information is held might be made as simple as arranging for a separate sealed letter to be kept with the original Will. More complex safeguards could be used, but the point here is that there is a plan in place. Clients taking the DIY approach might not consider taking steps beyond just leaving a note to be found after their death. Making provision in the Will does not of course deal with what should happen if someone loses their mental capacity. It would be hoped that any sensible Wills specialist would also include taking a more proactive approach about this as part of their Will advice.
So why is it important that those dealing with Will drafting now move to a more active approach to digital assets? The simple answer is money. We have already pointed out the financial value of social media “assets” or the close connection to how clients access and keep information about their bank accounts digitally. What we have not considered is the growing number of people who also hold crypto assets or more recently those buying digital fungible investments, sometimes for hundreds of thousands of pounds.
As society has steadily moved to become more financially reliant on digital assets and investments, it is hard not to consider any lawyer taking the DIY approach as risking the accusation of professional negligence. If a Wills specialist advised a client that they did not wish to discuss the client’s bank, share, pension or property assets, the specialist would certainly be negligent. Why would ignoring someone’s digital assets be any different?
The question of digital and crypto assets has become important enough that the topic is now the subject of a Law Commission research project. There is a lack of clarity in the law around property rights relating to digital assets. There is also a need for law reform to enable effective estate planning and administration. The research project is at the consultation stage, but in the next few years the Law Commission will no doubt publish a consultation paper and report. The current law in England and Wales is flexible enough to deal with many aspects of digital asset ownership, but some clear guidance and protection in the field of Wills and probate would be welcome.