You might have decided who gets your property, antiques and cash when you die, but what about your iTunes collection and your digital photos?
Making a will isn"t one of life"s most pleasant processes. However, it is a necessity if you want to make sure everything goes where you intend after your death, and that any other wishes are also dealt with as you"d like. Whether you sit down with a lawyer or talk with your family and friends about the assets you"ll be leaving behind, the chances are that you"ll focus on the large items such as property, cash in the bank, financial investments and specific, personal objects such as cars, furniture and jewellery. But did you think about those assets you have online or on your hard drive?
When it comes to making a will, the simplest but least prescriptive way is to indicate who you wish to leave your movable and immovable assets to, without indicating what those assets actually are. Of course, the younger we are, the less likely we are to know exactly what assets we will own at the time of our death - but while it"s usually quite easy for an executor to identify physical or financial assets, our digital property is far more difficult to locate.
Think about it. Whereas once upon a time your music collection would have been easily found in your home, today it"s likely to be found in cyberspace, courtesy of iTunes or Spotify. The cash in your savings account at the local bank may be easy enough to identify, but what about your Bitcoins or the money you have deposited in an online-only bank account?
“There"s a real range of digital assets,” explains Corinne Staves, Partner at London-based law firm Maurice Turnor Gardner. “There are those assets that are actually physically yours, such as photos or a book that you"ve written, say. There are also your digital accounts such as iTunes or Kindle.”
While ownership of a manuscript that is held on your PC is easy to establish, problems arise with accounts that have been opened with service providers. “iTunes is a good example, because you don"t own it,” says Staves. “For young people who have their entire music collection online, that will be lost.”
What do you own?
Digital assets raise two problems for executors. The first is the issue of ownership and the second is locating and accessing those assets. While we only have a lifelong license to access books on kindle or music on iTunes, it is the case that even the hardware from which we access those accounts comes with strict conditions that affect the legality of handing them down through the generations.
“We have cases where people want to pass on iPads, but under Apple"s terms and conditions, they have to be wiped first,” says Julie Harrigan, Associate at Channel Island law firm Collas Crill.
When it comes to the task of actually locating assets, it"s often the lack of clear documentation that can cause problems. “People are increasingly banking online, so they don"t have a paper trail for their accounts” says Harrigan. “If someone does have online accounts and there"s no paper trail, the executor won"t know of their existence.”
As well as those digital assets that have an equivalent in the physical world, such as books or CDs, there are the countless services that we use entirely online and which didn"t exist before the digital age.
Facebook, Twitter, Gmail, Instagram… these are all services that exist only online, and which often contain our own intellectual property, such as photographs, thoughts we"ve written down and messages we have sent to the many people in our lives. Irrespective of whether we want those photos passed on to others or our messages saved for posterity, unless the accounts are identified and the usernames and passwords passed on, then they will just sit there in cyberspace as caches of some of our most personal information. And even if our executors do know they"re there, it"s not necessarily true that they"ll know what to do with them.
“People should express a view as to what they want to happen,” says Julie Melia, Partner at Ogier in Jersey. “Families can have different views on whether they want things to remain online or not.”
To expedite this process, it"s important that people make their executor aware of the digital assets they have, where they are and what they want done with them. “We"re saying to clients that they should create a digital will that sits alongside their ordinary will and helps guide the executor,” says Staves.
The problem that relatives have is that whether it"s passing on an iPad without wiping it first or handing over passwords to accounts, many of these actions are in contravention of the terms and conditions of the service. “Using someone"s details is technically an offence, although many providers are becoming friendlier in this regard,” says Staves.
Passing it on
An example of a service that offers a friendlier approach is Facebook, which now provides a memorialisation feature. This allows friends and relatives to continue posting their thoughts and memories on the account after the account holder"s death. However, to enable this, a "legacy contact" - someone to look after the account once it is memorialised - must be appointed during the account holder"s lifetime.
A key advantage of internet services, particularly those offered via the cloud, is that they aren"t limited by national boundaries, and in this regard, a deceased person"s local jurisdiction is secondary to those all-important terms and conditions.
“We would deal with the assets wherever they are,” says Melia. “Jurisdiction isn"t as relevant as terms of service. However, there might be a US statute which restricts access to the asset.”
The current situation in which relatives of the deceased aren"t technically allowed to access online accounts is likely to remain the case until jurisdictions bring in their own laws to change this.
“There are a number of states in the US that have legislation in place for digital assets,” says Julie Harrigan. “In Jersey, there"s none.”
In the US, the state-by-state approach has been bolstered by the Fiduciary Access to Digital Assets Act, which aims "to allow executors, trustees, or the person appointed by court complete access to the deceased"s digital assets". Such a law would supersede a service"s terms and conditions and provide the right person with the access they need to carry out a deceased person"s wishes.
While the law has a great deal to do to catch up with our digital worlds, this lack of statute does create opportunities for the Channel Islands.
Staves points to Guernsey"s image-rights legislation as proof that the islands can capitalise on this lack of legal standing. “Guernsey"s led the way in creating the image-rights registry, so perhaps they can manipulate the laws to take advantage of tax. This might represent an opportunity for the Channel Islands when it comes to inheritance tax. If these [digital] assets have inherent value wouldn"t you rather they are taxed in Jersey or Guernsey rather than in the UK?”
There is no doubt we"re all behind the curve when it comes to providing for a smooth transition of our digital assets after we"ve died. As individuals, we are neglecting a whole new side to our lives and the simple act of providing a list could save our loved ones a great deal of pain.
As jurisdictions, the Channel Islands could set in motion lawmaking to protect their citizens from uncertainty when loved ones have passed. But lawmakers should also be aware that there are opportunities in the digital Wild West, and both islands are well placed to make the most of such uncharted territory.