Death in the digital age

Estate planning can be a complex endeavour, spanning multiple asset types and legal jurisdictions and encompassing all the best and worst of human nature in the face of grief and money. The rapidly evolving digital world can serve to thwart the best-laid plans, leaving cherished memories and real financial assets out of reach online.

Death in the digital age

Internet and cloud-based assets have created a whole new category of estate planning, but probate law and tech companies are struggling to keep up. Some firms have a system for death, such as Facebook’s private user agreement, which allows someone to “inherit” the account. But even if heirs say they want the account deleted, or held in memoriam, doing so requires uploading a death certificate. If descendants have to do that for every account, they will be mired in digital death for months, at a very difficult time. And that’s if they can locate all the accounts.

Digital dollars

There are already up to GBP15 billion of unclaimed financial assets in the UK lying around in old bank accounts, pensions, life assurance and investments that have been forgotten or mislaid, both in life and after death

With accounts moving online, from internet banks to cryptocurrency investments and online-only portfolios, that figure will only grow. While it’s easy to see why aspects of estate planning like your Twitter feed might be forgotten, it’s astonishing the number of people who forget to leave details of financial accounts behind.

Your digital diary needs to have a complete record of all financial assets, including how to access them. Of course, that means that such a document can’t be left lying around. It should be kept with your will by your solicitor under lock and key, or potentially in a safety deposit box. And this document needs to be kept up-to-date. Every time you’re required to change your password for whatever reason, you also need to make the time to update the document so that heirs aren’t left knowing that there are millions of assets stashed away forever out of reach.

Dealing with digital legacies

Families who are locked out of social and email accounts can lose precious memories in the form of family photographs, messages and writings. Dormant accounts can also become targets for hackers, who will try to use the information to scam family members or set up identity fraud2.

Ideally, heirs would have the ability to close any accounts of a deceased family member, from social media to supermarket delivery

But in practice, the user agreement of many online accounts forbid any unauthorised access, even someone using a password and username they’ve been given.

Legislation is currently being enacted in the US to deal with digital assets – the Model Uniform Fiduciary Access to Digital Assets Act – but no laws currently exist in the UK to address these issues. Until the law catches up worldwide, High Net Worth Individuals (HNWIs) need to maintain a digital diary that contains access methods and locations for all intangible assets. This document is not easy to compile, requiring every account from Dropbox to Gmail, and, like the records you keep for your financial assets, it needs to be consistently updated to ensure that it’s current.

When online is your business

For some HNWIs, digital assets can be both a precious memory and something that is of financial value. Photographs of celebrity figures, for example, could be deemed of monetary value, as could the writings of someone who makes a living from the written word or the videos of a YouTube personality who is earning thousands from advertising revenues. In this case, savvy HNWIs should treat their online persona as what it is – a business.

YouTube personalities, whose primary business is centred on their YouTube channel, have probably already incorporated as a business, but those with videos that are tangential to their main business – the business advice videos of a charismatic CEO or the video diary of a wellness guru – should ensure that the products are part of their overall business so they can be handled in that part of their estate after death.

The way forward

The key to managing digital assets is to be pedantic about cataloguing them and then plan accordingly.

In the absence of adequate legislation to handle the online world, HNWIs and their advisors need to be proactive and take matters into their own hands. While most commonly used websites, such as YouTube, Facebook and Twitter, offer broad guidance in their Ts and Cs or help document what happens to accounts after death, they are for the most part woefully inadequate in dealing with the emotional and financial intricacies of the problem. Only by assessing and documenting digital assets and considering all online accounts can HNWIs ensure that their families can hold on to cherished memories, lay claim to digital dollars and keep their loved ones and themselves safe from hackers.

1“Reclaim Forgotten Cash”, MoneySavingExpert, November 2018
2“Facebook accused of failing to stop scammers hijacking dead people online and trying to scam their families”, The Telegraph, July 2019

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