There is no doubt that we are relying more heavily on digital technology in many aspects of our day to day lives. From social media and cloud storage of photos and music, to online banking, cryptocurrencies and even the way in which we heat our homes – consumers are increasingly using and creating digital assets.
Whilst the increasing use of digital assets has obvious benefit not just to our lives but arguably also for the environment as increasing numbers of organisations and individuals go paperless, it is clear that this is creating a growing problem in the event of an individual’s death or incapacity, with next of kin often experiencing frustration and distress in trying to access these digital assets when required.
A Private Members Bill introduced to Parliament by a local MP earlier this month is aimed at making this process easier for family members. The Digital Devices (Access for Next of Kin) Bill had its first reading on 18 January and has been scheduled for a second reading in early February. The Bill has attracted support from several cross-party MPs and the House of Lords. Should the Bill become law, the default position would be that in the event of a person’s death or incapacity, next of kin would automatically gain access to the contents of digital platforms used by that individual.
Indeed the Society of Trust and Estate Practitioners (STEP) released a report in September 2021 following a survey of its members. The report found that although this is an issue which is being raised by some clients during the estate planning process, it is clear that not only is more work required to educate both clients and practitioners in this area, but collaboration with tech companies is needed to achieve a coherent approach and to ensure that proper procedures and best practices are implemented. Furthermore, the report highlighted the need for urgent legal reform. Whilst some tech companies have introduced pre-planning measures such as legacy tools to their platforms, there is still a long way to go.
Digital assets comprise not only assets of monetary value, but also of sentimental value. It is estimated that around £25 billion worth of assets in the UK are held via online accounts, social media, cloud storage or other protected electronic means. Of course this is a worldwide issue and many will have read the widely reported story of Canadian man Gerald Cotten, CEO and founder of Quadriga, who died in 2018 leaving the company without access to the $140 million worth of bitcoin which it held for its customers. Clearly the stakes will not be so high for most individuals who hold digital assets but nevertheless, it is crucial that personal representatives or next of kin of a deceased or incapacitated person are able to access assets, monetary or otherwise.
Although preparing a list of digital assets along with one’s Will may be helpful, clearly writing down or sharing access details such as passwords could create security issues and there is also the risk that the information will quickly become out of date. Therefore it is clear that dedicated legislation is the only way to provide true clarity and certainty to clients and practitioners alike. Many states in the US have already introduced legislation in this area, with other countries following suit. It remains to be seen how quickly the UK will introduce such legislation, but practitioners are likely to be keeping a close eye on the progress of this new Bill.
If you would like more information on the issues raised in this article or if you would like to discuss your own estate planning, please contact Fiona Kirkpatrick in our Private Client Team at Fiona.kirkpatrick@tughans.com
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.
