What happens to our digital assets when we die?

Our digital footprints are larger than ever, and we have to consider them in our end-of-life planning.

The digital footprint of the average person is constantly increasing. While much of it is disposable social media output, large portions of it are very valuable to us, either from a sentimental or financial perspective. While the percentage of the population actively online climbs ever upwards, strikingly little thought has been given to what happens to our data and digital assets when we pass away. Nor, indeed, to how we access it.

Financial assets

For our financial assets held online – whether that’s cryptocurrencies, non-fungible tokens (NFTs) or more vanilla holdings such as online savings accounts – the issue is practical, rather than legal.

“There’s no issue claiming them, as long as you trace them,” explains Gary Rycroft, partner at Joseph A Jones & Co Solicitors. “The job you have when someone dies is to find the assets and pass them on to the right people. Clearly, one of the most important factors in that is knowing where to look, and when things are online, you have to know they’re online and be able to log in and find them.”

James Norris is the founder of the Digital Legacy Association, which campaigns for a greater framework around death, digital assets and our online footprint. He gives the example of gambling accounts, which are often overlooked, but frequently hold the deceased’s cash, which could range from very little to a large amount. “Very often gambling companies charge inactivity fees, so they won’t know if somebody has died,” he explains. “They charge £2 per month and that continues until the money has been depleted.”

Legal problems

“Our digital assets are increasing and the value of these digital assets from monetary, cultural and sentimental perspectives is also increasing,” Norris explains. “They’re fragmented across a variety of online accounts and devices, and each platform and each device that we use has its own terms of service set by the service providers in terms of data sharing.

“Most platform providers or manufacturers don’t offer these services or products thinking that their customers will at some point die. Most of the organisations that hold our data are private companies and their purpose is to make money, not to ensure that your account remains active to maintain sentimental value – although they do tend to understand there is a responsibility to be able to pass on digital assets of value after somebody dies.”

With each platform having its own terms of service, the way in which data can be transferred differs based on how that platform operates. Many providers are now playing catch-up trying to ensure that data can be passed on once somebody dies.

“When it comes to helping somebody with their digital assets, it’s important that professionals are able to have conversations with their clients, especially as it’s a new area and there isn’t much of a history to it. It’s not something that springs to mind and that people plan for.”

Logging in

“A few years ago, a large insurance company put out a press release which said the best way to safeguard your passwords was to make a list of them, put it in a sealed envelope and give it to your solicitor, which sets up a whole range of issues in terms of breaking your terms of service,” says Norris.

While that may not be advisable, it points to a real issue faced by a large number of people when it comes to handing over access to their loved ones: logging in.

“On the Digital Legacy Association website, we have a template that allows people to really gain understanding of what they have and to share what their wishes are for those specific accounts. Password managers are an effective tool and some of them allow you to share with family members if you pay for a premium version. In some circumstances, you’d be allowed to grant access depending on the platform, but for some services you could risk breaking your terms of service.”

“There isn’t a right or wrong way to plan for death digitally,” Norris adds. “There are millions of pounds of lost financial assets every year that aren’t retrieved because people don’t move their cash out of these accounts. It’s really important people understand which platforms they use. They might want to grant joint access, you might want to transfer assets and that’s individual choice.”

What if I do nothing?

Sadly, this isn’t as much of an option as one might think, as it leaves open a variety of risks.

Fraud is the most obvious. Allowing detailed social media accounts and financial assets to remain online untouched provides would-be fraudsters with rich sources of information with which to either attempt to access unclaimed cash, or commit identity theft.

A less nefarious outcome is that businesses may use the deceased’s information to train algorithms.

“There is a means for someone with due legal authority to go along to these companies and say ‘I am the right person, here’s my proof’,” explains Rycroft. “Some tech companies are more cooperative and accept that grant, while others still hide behind customer privacy.”

“I can see accountants and lawyers being the receptacles of this kind of information in an encrypted way,” says Rycroft. “I can see it’d be a very good thing in terms of business development for accountancy professionals and legal professionals to be the receptacle of people’s digital assets, as long as they can protect them sufficiently.”

Useful services

Tell Us Once: This is a service provided by the UK government, which enables relatives to notify most government departments of a loved one’s death in one go, rather than repeatedly having to tell them all separately.

My Lost Accounts: A platform that allows users to enter their details or those of a loved one and, once validated, search for all bank accounts where money might reside. My Lost Accounts searches all UK banks for matches to the details entered and pulls them all into one view. Users can then be sent a cheque for the cash value of the holdings in each bank.

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.