How would you react if someone on the other end of the phone said “fantastic” in response to hearing that your spouse had died?
This is what happened to Louise Kaye when she phoned her mobile phone company’s helpline to close her late husband David’s account. The employee had good intentions, Ms Kaye says, but the company had clearly failed to train its staff properly when dealing with the death of a customer.
“I knew the person on the other end of the line didn’t mean to be offensive — it was just his way of speaking — but it shocked me, and he kept saying it after everything I said. It is just not an appropriate response,” says the artist and charity fundraiser, who was also surprised to hear loud rock music played over the phone while she was kept on hold by the bereavement team.
The mobile phone encounter was just one of many disconcerting experiences Mrs Kaye, 62, went through while trying to put her late husband’s finances in order. She was made to close the couple’s joint credit card, only to reopen it again in her sole name, thereby causing all her regular payments to fail. Then there was the impossible situation she found herself in regarding the family Netflix account, which was linked to her husband’s password-protected email account, and the hours she spent on the phone to Canada just to pay an outstanding credit card bill in his name.
Dealing with companies in relation to her husband’s finances was far more complicated and time-consuming than she had expected, but it was the digital aspect of his estate that caused the biggest problems.
“David was very organised and had collected and recorded all his passwords in one place . . . but because he died suddenly he didn’t get the chance to tell me the master password, so now I can’t get into any of his accounts,” Mrs Kaye says.
Her experience underlines the difficulties that digital assets can cause for those going through a bereavement, the variation in company rules governing access after death and the widespread confusion over the rights we have over our digital assets.
As our use of online services continues to grow, it remains up to individuals to ensure they have made adequate preparations for handing on their digital assets. If not, they may bequeath their loved ones an unnecessary burden of stress and red tape — and in some cases force them to seek legal help to resolve matters.
Earlier this year a case reached the UK courts involving Rachel Thompson, a 44-year-old mother whose late husband, from whom she had been estranged, had died a few years earlier having failed to make a will. Ms Thompson had to turn to the courts to obtain an order forcing Apple to allow her access to her husband’s online account so she could retrieve important family photos from the photos and videos he had stored online.
“The best thing Mr Thompson could have done was leave practical measures in place to allow Rachel to access his account — by leaving his passwords and access to email,” says Angharad Lynn, senior associate in the private client team at law firm VWV.
There is currently no legal definition of digital assets in the UK, but it is generally taken to include email accounts, social media and photographs stored online, as well as digital documents and online services. Digital assets with financial value include online banking accounts, PayPal, online shopping accounts and cryptocurrencies. Online assets with “social value” include LinkedIn, Twitter and Facebook.
“Most people have a digital aspect to their life, whether it’s social media profiles, online banking and shopping accounts, or documents stored in the cloud with web-based services such as Google Drive or Dropbox,” says Ms Lynn. “But while we live in a world in which more of the things we most value are digital, very few of us have made any preparations for what will happen to these digital assets when they die.”
The first piece of advice often offered by experts in this area is not to wait to put your digital affairs in order, but to do so as part of day-to-day financial housekeeping. Assemble a list of online accounts with usernames, store it in a safe place and share a copy with a lawyer and executors, says Catriona Lumiste, a specialist adviser in later life and care fees planning.
Bereaved people can find it hugely frustrating to deal with financial issues when going through the death of a loved one. “Having a list makes it so much quicker and easier for the executors to track down assets on death,” she says. “Social media accounts should be closed on death but it is important to ensure you don’t risk losing valuable documents, photos or other sentimental records.”
She recommends it as a “good discipline” to review your will regularly throughout later life and update the list of your digital assets more frequently.
A digital will
The Law Society says people should leave clear instructions in the form of a digital will about what should happen to their social media and online accounts after their death. The Digital Legacy Association, which was set up to help educate people about how to manage what happens to their online presence after they die, offers guidance on how to leave your accounts accessible to the right people. A will template can be downloaded from its website, digitallegacyassociation.org.
“We’re spending an increasingly large amount of time online,” says James Norris, DLA founder. “According to Ofcom we are spending more time online than we are sleeping. Also, the value we place on our digital assets is increasing and the amount of money we are spending is rising.”
Mr Norris, who also works with Hospice UK, says he wants to help empower people to be able to decide what they want to happen to their assets. “It’s about working out which platforms they use and what needs to happen to each of them. What you can and cannot do with them depends on each individual company or platform’s terms of service”, he said. “Some people will have more sentimental reasons for their digital legacy, and others more financial, for example deciding where PayPal credit or cryptocurrencies go.”
A digital will can resolve many outstanding questions about your wishes after death. However experts point out that it is a statement of wishes rather than a legally binding document. Even if you set out what you want to happen to your digital assets in your will, assets won’t necessarily be passed on as you want them to be.
“The law that deals with the succession of digital assets has so far struggled to keep pace with rapid developments in technology,” says Ms Lynn. “It is sensible to appoint a digital assets manager in your will, but it is unclear whether providers of digital content will accept such an appointment as consent to disclose account information to the manager, or to allow the manager to reset passwords.”
For example, the terms of Apple iCloud, which is embedded into every Apple device to store photos, files, music and documents, state that there is no right of survivorship. “Unless otherwise required by law you agree that your account is non-transferable [and] that any rights to your Apple ID and content within your account terminate upon your death.” In practical terms, this means that even if a person makes a will stating that documents or photographs stored on iCloud are to go to a certain individual, they may require a court order to make that happen — as Ms Thompson was forced to do.
“Some of our so-called digital assets are not digital assets at all but are licences that end on death,” says Natasha Stourton, senior associate at law firm Withers. “For example, if you have a Kindle book reader you do not own any of the titles on your Kindle. You have a licence to use them their during your lifetime, and when you die that licence dies with you. It is the same with music streaming services such as Spotify — you have a right to listen to the music during your lifetime, but that right ends on death.”
If people have favourite books or music they want to hand on to their loved ones, this means they must own them in hard copy form. There are other digital assets where people do have rights, but which cannot be handed on in the same way as physical objects. These include some digital photographs, copyright, domain names, loyalty points and email content.
At the court where Ms Thompson’s case was heard, the judge called for a change in the law to clear this confusion and make it easier to resolve such problems, stating that companies owe a “digital duty of care to grieving families”.
Terms and conditions
There is considerable variation in the rules laid down on digital assets by technology companies. Facebook and Instagram allow the page of a deceased person to be memorialised so that it can still be viewed; a legacy contact can also be nominated in advance to manage such a page. Google allows users to select an executor if their account has been inactive for three months or more. As mentioned, Apple will only allow access if someone has left a will or there is a court order.
One area where ownership rights are clearer is cryptocurrencies. Assets such as bitcoin will remain available after death and can be passed on, but the contents of the wallet can only be accessed with a private key. If someone dies and does not provide access to the private key to their executors, the bitcoin assets will be lost.
Options to forestall this include the owner simply writing down the key somewhere safe, storing it on a flash memory drive that will be found by loved ones or advisers or entrusting it to a commercial service, say experts.
Other assets to consider include online gaming accounts. “Many people don’t realise that their estate might now include digital assets of significant value such as accounts and characters in online games, such as World of Warcraft, YouTube videos and photographs of celebrities. The question is how people value these assets?” says Ms Stourton.
As with physical assets, digital assets need to be assessed in relation to their tax treatment. “Unlike many digital assets, which have a purely sentimental value, bitcoin has financial value and will be subject to inheritance tax in the same way as more traditional assets contained in an individual’s estate,” says Ms Stourton. HMRC has produced guidance on the taxation of cryptoassets, confirming that these assets are treated as property for the purposes of inheritance tax.
Passwords are the key to helping your executors and relatives manage your estate after your death, ranging from those for social media accounts and email accounts to retail accounts such as Amazon and PayPal. Password managers such as Dashlane, LastPass, Sticky Password and 1 Password will encrypt and store logins for all of these, so you only have to remember one password.
These companies use software that encrypts this master password and stores it only on your devices, meaning that even if the password management company is hacked, your assets should be safe.
It is not a good idea to include passwords within your will because wills are public documents. Instead they should be included in a private letter of wishes to accompany the will. As a common alternative, many people disclose passwords to a nominated executor or a loved one as a way of ensuring that assets could be passed on.
Julia Schtulman, an associate at Withers, warned that for some sites, disclosing passwords and other security information could risk breaching the terms and conditions — a factor which often lies behind companies’ reluctance to grant access to third parties for fear of breaching confidentiality and privacy issues.
Many people heading into later life agree a power of attorney for their finances — typically a family member or trusted adviser — who can manage their affairs in the event they no longer have their capacity to do so themselves. Though power of attorney ceases on death, it can also help a family sort out digital assets, since attorneys may have been able to operate accounts or have been entrusted with key passwords.
End of life planning
Those seeking help to gather together the information their families will need to organise the estate once they are gone can now turn to companies to assist with the task.
In the US, companies such as Cake and Everplans, and in the UK Kinherit, offer “end of life” administration services, such as coordinating arrangements around transferring assets on death, discussions on inheritance tax planning, using the residential nil-rate band and understanding complicated trusts.
With Kinherit, users can sign up for three different levels of service, costing upwards of £250. All levels offer a will-writing service, end of life planning and a secure online vault for documents. Users will also get regular reminders to update changes.
Another company, Lexikin, offers a secure record of “assets, wishes, memories and legacies”. On its website you can have a will drafted, store documents, index your accounts, social media and photo libraries, use an asset calculator to leave a summary of your estate, find a wealth manager and direct your charitable legacies.
“Not preparing your digital legacy could cause a great deal of stress for your loved ones after you’ve gone,” says Ben Mason, managing director of Kinherit. “The question we ask clients is, if you died today — do your people know what you have? The answer is often no.”
Don’t let data slip through the cracks
The Digital Legacy Association offers a checklist for anyone wanting to organise their legacy.
- 1. If you have a security password on a mobile phone or any other electronic device, think about how best to manage your passwords, so that a loved one or executor can access them after your death.
- 2. If you have a social media account such as Facebook, download your photos and videos from the service and pass them to your next of kin. You may also want to provide administrative access of your social media accounts to someone you trust.
- 3. If you have online subscriptions or bank accounts, make suitable plans for each.
- 4. If you have photos or videos stored on electronic devices or on a company-hosted computer server you may want to make a folder of your favourite photos and share them with a friend or family member. Sharing can be done via internet service or by using an external memory stick on a hard drive.
Get alerts on Personal Finance when a new story is published