This is the talk I gave to the Law Society of Scotland private client update seminar in Stirling earlier today. If you would like a copy of the slides please email me.
Thank you Bill for that introduction. Good morning everyone.
I was in fact a trainee in Bill’s old firm. I begin my traineeship in 1993. Thinking back, the world, and of course the legal world, was a lot different. I had a computer on my desk although calling it a computer might be stretching things. No email. The day’s mail was delivered to your desk. No mobile phone and certainly no BlackBerry. No social media and a lot less hassle from marketing people. Happy days.
So to this morning’s talk. Why you need to know about digital assets.
I have a lot to cover in about 45 minutes. There will though be some time for questions at the end. A copy of my talk will also be sent to all delegates.
So what will I cover this morning?
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I will start with some background and in particular the growing importance of digital assets to our and our clients personal and working lives.
I will then look at some of the issues associated with digital assets.
Next I will look at how different providers of digital assets and in particular social media providers deal with these issues.
I will also outline some practical guidance when dealing with digital assets.
Lastly, I will provide a few thoughts on the future. Always a dangerous thing to do but nonetheless good fun.
As a matter of interest, and just by a show of hands, how many of you are already dealing with digital asset issues?
For example: have any of you had trouble finding an online bank account, or tried to close down a LinkedIn account or memorialize a Facebook page?
I would like to start with a general point. Digital assets may be a relatively new phenomenon but in my opinion do not present us with completely new issues but rather old issues repackaged.
Although often talked about negatively, there are a huge number of positive aspects to the digital world we now live in. Many of which are obvious. The negative aspects are also sadly familiar to us. Whether it be fraud or bullying.
Now for some background.
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There is no doubt of the growing importance of digital assets to us and our clients in both our personal and working lives.
For example. How did you find out about this event? How did you book your place here? How did you pay for it? Will you be tweeting about it? Will you blog about it? Will you take the chance to catch up with friends by text or email or update your Facebook page whilst listening to today’s talks?
So what are digital assets?
Digital assets broadly fall into two categories:
- Personal and sentimental items
- Financial information and assets
There is a though a lot of overlap.
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For the first category, in an earlier age we would have kept these items in a more solid form. Our letters, photographs, diaries and videos have been replaced by their virtual equivalents. Even those items which were created in a more solid form are now often put into a digital format.
The slide shows just a few examples. The list is potentially endless as more and more are created. We are not just talking about Scottish, UK or US sites but sites from almost every country in the world.
To be clear, it is the content that we are primarily interested in and not the fact that our clients may have used certain online accounts. It is this content created that our clients are likely to want to pass on to their family members and friends. The involvement of a third party provider such as Twitter is the complicating factor here. I will come back to this point.
The second category were also once held in another form.
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Whether it is banking, savings accounts, online investment portfolios and share trading accounts, online shopping or betting and gaming accounts, most of us have an online financial presence in one form or another.
Most tax returns are now filed online. It is rare to be involved in an executry where there is not an online bank account.
Then there are our email accounts, work and personal. A great deal of personal information may be contained within these emails and also the attached files.
As someone who grew up in the Borders in the 1970’s and 80’s I see what once was regarded as science fiction is now the norm.
I have a twitter account, a LinkedIn account and I blog. Most of my banking, work and personal, is done online. I have two email accounts. I use Skype for business meetings and for catching up with family and friends. This is I suspect the same for many of you here today.
I can also remember saying I would never use many of these accounts. I said exactly that to my business partner when he set up a Twitter account for me. And now almost 3,000 tweets later!
The average person it is claimed now has more than 10 online accounts, including social media, shopping and bank accounts. These obviously contain a great deal of personal information and have value whether it is financial or sentimental.
It is thought that 2 or 3 billion people now have some form of online presence. That clearly must effect what we need to do as private client lawyers.
As I have already said, the importance of these assets to the way we live our lives and also how we work is obvious. Can we imagine no emails, online banking or Facebook?
For example my own firm. I do not think we would have set up Legal Knowledge Scotland in the pre-digital age. Digital assets are hugely important to my own firm. We sell a large number of styles online. The client accesses them online and pays for them online.
Already I suspect some of the issues that we need to address are becoming obvious.
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So what are these issues?
Let’s start with awareness. Do our clients even know they have digital assets? Even if they are aware it may not matter to them. Might it only matter to them once the issues are explained to them? Let’s not forgot that relatively few people in Scotland have Wills.
Even if your client has some awareness, is it likely that they will have considered how their executor will know which digital assets they have? If everything is done online and possibly by email there might not be a paper trail for an executor or family member to follow.
Do we know what happens to social media accounts and the associated content when someone dies or becomes incapacitated?
Are they always closed down? No.
Can the content always be recovered? No.
A great deal of content cannot be recovered and even if it could have been a deadline may have been missed.
How many people actually know that they don’t own the music in their iTunes account or the books in their Kindle collection? They only have a lifetime licence. The small print specifies that these rights terminate on death and are not transferable even if accessed on a device owned by someone else. This could come as a shock to a user who has spent a considerable amount of time and money building up their music or book collection. You may remember Bruce Willis being mentioned in this context. Sadly that story seems to have been misreported.
Is your client aware of how he might protect his digital content? I will come back to this point.
The fact that our working and personal lives seem to merge more and more raises another issue.
Where does one use end and the other begin? I suspect many of you have a work email account and also possibly a work twitter account. What about your LinkedIn account? Is that your account or your firm’s?
What happens if you die or become incapacitated or even move jobs? Even though these are likely to be primarily work accounts they may also contain personal information and content.
Then there is privacy. Are there things that our clients would prefer not to be widely known even on death? Yes there often are. This is also not a new issue.
A former colleague recently told me about a matter she had to deal with. She was working on an executry and the deceased was married at the time of his death. She came across evidence that he was using an online dating account.
She decided to use some discretion and did not make an issue of this as she did not see this account as an asset nor was any money owed or due.
Do you think she should also have contacted the provider and asked that the profile be removed from the site? I will leave you to think about that.
What about this situation?
A friend told me recently that he had seen the profile of a colleague on an online business networking site. This person had died several years before, but the profile was still there unaltered. Presumably, the deceased’s family was unaware of the site or had been unable to remove it.
I do not know if this was something the executor tried to deal with or simply that it did not occur to anyone. The point is that my friend found this upsetting. This could also potentially cause distress for family members. Again something to think about.
Similar issues might arise if you come across online gaming accounts or pornography accounts. As I have said, these are not new issues for solicitors and executors to deal with.
This is not about us making judgements as to what is and what is not appropriate. This is about us finding out what our clients want us to do with their online accounts on death. Without instructions this makes the task much more difficult.
The information we come across may also not just effect the deceased’s reputation. As I mentioned at the beginning of this talk there are many negative aspects of the digital world. Information in the wrong hands can lead to fraud, identity theft, blackmail and cyber bullying. That is another reason why it will be important for many of our clients to think about this issue.
Our clients may also have virtual pets, virtual farms, virtual relationships or virtual games characters.
Two examples. “Second Life” players adopt a new identity and can move around, work and socialise in a computer generated environment.
“Virtual Farm” is a farm and time management game. You choose your crops, till your ground, water your fields, harvest your plants and sell your goods.
You come across so many amazing stories when you research these type of virtual assets. I will only mention one this morning.
You may remember reading about a jilted Japanese woman being arrested for “murdering” an avatar in an online role-playing game after it divorced her character. She was charged with illegal access onto a computer and manipulating electronic data. As I said, what was once science fiction.
What if anything can be done with these particular type of virtual assets on death? The terms and conditions of use are obviously very important. That said, the law as yet does not have a complete answer to that question. These assets do though have value, and if something is valued – whether financially or sentimentally – people will want to pass them on to their family and friends.
With all this in mind, would an executor even know where to start? When I say executor I also mean a solicitor acting for an executor.
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Let’s remind ourselves what executors are generally expected to do?
- Collect in the assets of the estate and pay the liabilities of the deceased
- Deal with HMRC and settle any tax liability
- Distribute the estate in accordance with the terms of the Will or the rules on intestacy
We all know that an executor goes beyond what I have just said as they also administer the estate and deal with numerous other matters.
An executor will of course need to deal with the deceased’s digital financial accounts and is likely to be used to doing so.
Financial institutions will typically require sight of a death certificate plus Confirmation before releasing the funds. They will also usually require proof of an executor’s identity. This also applies to newer types of financial accounts such as eBay or PayPal.
What though of the deceased’s social media accounts?
How much time and effort should an executor put in to tracing the deceased’s social media accounts? Should any effort at all be made to trace these accounts?
Remember much of the content may not be retrievable and cannot therefore be passed on. Also many accounts are simply closed after a certain period of non-use. Some common sense needs to be applied.
It may be that one particular family member wishes to deal with the deceased’s social media accounts. That said, an executor must be kept informed of what they are doing.
In any case it may be that an executor only finds out about these accounts from a family member or friend.
That begs the question. Should an executor as a matter of course google the deceased’s name and see what comes up? HR people already do this.
The deceased will also have agreed to certain “terms” for using each account. Also remember that these terms keep changing and each provider’s terms are different.
What about when the executor knows about these accounts? What if the executor also knows the deceased’s passwords?
As we know executors do not automatically have access to and control of the deceased’s assets on death. There is a process that needs to be followed.
Is there a temptation to access these accounts if you have the password? Of course there is. There may be a concern that content could be lost. That said the terms of use should not be ignored and in almost all cases the provider should be contacted before accessing the account.
To be clear, an executor accessing an online account using the deceased’s username and password could be committing a criminal offence of “unauthorised access” under the Computer Misuse Act 1990.
I am sure most executors do not want to be involved in a dispute as to whether they had permission to access an online account.
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For example these are Facebook’s terms:
- 1.You will not share your password (or in the case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account.
2. You will not transfer your account (including any Page or application you administer) to anyone without first getting our written permission.
These are clear many are not.
If a family member tells you that they are going to, or possibly already have, accessed the deceased’s digital accounts then you need to tell them they may have breached the “terms of use” and possibly broken the law. The best option is always to contact the provider first and check to see what can and cannot be done.
Now briefly a few comments on incapacity.
The procedures to follow when dealing with financial accounts and also digital financial accounts are well established.
One new issue might be that access is made using the person’s password and without informing, for example, the bank in question. That should not be done. The bank should be informed that someone is acting under a Power of Attorney. I would also recommend that you specifically ask the bank whether you can continue to use the same password.
What though of social media accounts? The rules relating to social media accounts are not as clear.
Before I discuss social media accounts in this context it is worth saying that I am sure in most cases, when someone has lost capacity, what happens to their social media accounts is not likely to be the main issue that needs to be dealt with.
One example of where it might be an issue is if someone is posting abusive messages on an online account such as Facebook or Twitter.
The first issue is that the Attorney, if there is a Power of Attorney in place, should again not just access these type of online accounts. Firstly look at the Power of Attorney and see if it has the power to do what you think needs to be done.
Even if an Attorney does think he has the power to do what needs to be done, I would still recommend that he check the terms of the account and contacts the provider. Although given how complicated some of these terms can be, it is probably easier to just contact the provider.
If there is a Power of Attorney in place many social media providers have procedures to have the account closed or suspended.
Not all though.
Again it may be that a family member will be tempted to deal with this issue themselves as they have access to the person’s password. Then again how many people share these passwords with family members? The issues that I have already mentioned regarding unauthorised access apply here as well.
If there is no Power of Attorney you would have to contact the provider to see what can be done and what they require you to provide them. If that fails you might need a court order and possibly not a Scottish court order.
So how do the main digital companies deal with these issues?
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Each digital service provider has different procedures for closing a deceased’s account or releasing content.
Normally they will request proof of death such as a death certificate or a link to a published obituary, as well as proof of the executor or family member’s relationship to the deceased user.
Helpfully most of the providers I have looked at have their contact details on their main pages. Most of them now also display fairly prominently some guidance on these issues.
I will now look in more detail at a few of the main providers.
Let’s start with Facebook. Facebook gives two options: delete the profile or set up a memorial page. If memorialised, the user’s personal information will be removed, and no one can log on to the account, but the user’s “wall” will remain and existing friends and family can leave messages.
Twitter will deactivate an account only after receiving proof of a user’s death, such as a link to an online obituary. Twitter will also help families to recover an archive of the user’s public tweets.
LinkedIn will close an account if they receive proof of death.
YouTube allows an heir or attorney control of the account and all of the content if certain conditions are met.
Flickr stores billions of images and has a strict digital death policy where upon receiving a copy of a death certificate they will permanently delete all of the deceased’s accounts and associated content. However, arrangements may be made by an executor to keep paying for the subscription if they wish to keep the content. This may not be necessary if the deceased kept a backup on memory card or CD.
There are almost as many email procedures as email providers. Google and Gmail will provide account information to family members at their discretion. Microsoft have a next of kin process. Others such as Yahoo are quite clear in that they will honour the user’s privacy and not release any record of email exchanges without a court order. You may remember reading about how the father of an American soldier killed in Afghanistan tried to gain access to the emails he had sent his son.
There are of course lots more. I have only mentioned a few.
Things are also getting slightly easier.
Almost all providers now accept the need for procedures on death. The procedures are also becoming easier to use and even more importantly many providers are now asking the user what they want to happen to their content on death. I will come back to this point nearer the end of this talk.
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So what should we be doing?
First things first. It is not an issue that should be ignored nor do I think it is being ignored.
Let’s start with Wills.
A Will is only as good as the questions asked and the information received. How we therefore approach taking instructions for a Will is very important.
Often we send a Will questionnaire to a client about the Will they want us to prepare or update. This gives them an idea of the issues that we want to discuss before meeting with them. Digital assets should of course be mentioned in the questionnaire.
Some of the issues that you might want to mention include how important it is to make their executor aware of their digital financial accounts. It is obviously much easier for an executor to know of a bank account where you have actual bank statements or a passbook.
You may also want to point out that if the executor has to spend a lot of time looking for their digital assets this means the executry might cost more and their beneficiaries might receive less.
You might also want to find out if they have they considered keeping an inventory of their digital assets. If they already have such an inventory, or will do so in the future, advise them not to keep a note of their account numbers and passwords in the same place.
What of their social media accounts. Do they know that some content cannot be retrieved? Have they taken steps to ensure that it is not lost?
For example, the deceased may have used a digital asset service.
These store digital content for a fee. Think of an online safe opened on death.
Other services allow you to store online details of digital accounts and passwords. A so called “digital beneficiary” is named who will be given access to all this information on the death of the account holder.
There is of course the obvious need to make someone aware that they have used these type of services.
What about the social media accounts that continue to exist even on death and the distress that could be caused to relatives and friends of the deceased. Do they want these accounts closed?
You may also want to ask them if they want specific digital content to go to specific people.
If your client does not want to leave specific digital assets to named beneficiaries in their Will they will simply be dealt with under the residue clause.
Physical assets such as kindles or computers are dealt with in the usual way. Remember it is the content held on these types of assets that should not be ignored and particularly where a third party provider is involved.
It is not really practical to list the digital assets, and in particular the more personal digital assets, within a Will. How would this be kept up to date?
If tempted to leave digital information in a Will and some of the information changes a codicil would be required.
I would not recommend putting account names and the passwords into a Will. This is likely to breach the bank’s conditions. The Will also becomes a public document.
Although an informal writing is preferable to leaving a list of digital accounts in a Will, mainly because the list can be kept up to date without having to continuously update the Will, the client has to ensure that on death the informal writing will be found and passed to the executor.
Alternatively, and like the majority of Scots, the client may wish to do nothing. If so a file note is required.
Now a few quick points on disputes.
I am sure many people in this room have had to deal with disputes between beneficiaries. These disputes are as often as not over small personal items that have a great deal of sentimental value. This could just as easily apply to digital assets.
One issue that has already resulted in disputes is where one family member wants a Facebook memorial page and another does not.
Another is where a partner leaves a law firm and there are restrictions as to how and when clients can be contacted. What if the partner leaving has a LinkedIn account and uses it to stay in touch with his clients? I know of a number of law firms that are trying to ensure that the LinkedIn account remains in its control in this situation.
Valuation of these assets could also be an issue and lead to disputes. It is not clear how to even start valuing many of these assets and in particular assets such as virtual games characters.
As mentioned, there may also be a dispute as to who had the right to access an online account after the user’s death. This might not just be between family members but between an executor and a digital beneficiary.
So to recap what do we and our clients need to think about doing.
There is a need to plan our digital afterlife by keeping a running inventory of our accounts and ensuring it’s kept in a safe place.
Content such as photographs need to backed up and legal advice needs to be taken if we have particularly valuable online assets.
And it is crucial that we let someone know of the digital asset planning we have undertaken so that these valuable or sentimental assets aren’t simply lost.
Before I finish a few thoughts on what the future might hold.
It is usually a dangerous endeavour to predict what might happen but in this case, certainly in the short term, it seems clear.
Awareness of digital assets will continue to increase as more of our lives become digitalised. More articles will be written and talks given. I also suspect there will be more high profile news stories surrounding these issues.
That means solicitors will have to be prepared to answer questions associated with digital assets.
This will happen in a number of ways. We will update our Will and executry checklists and our styles. We will produce help sheets and more information for our websites. We will also become more comfortable talking about these issues. We may also review our terms of business to be clearer as to what we will and not deal with.
What though of the companies providing these services.
The companies providing these services will continue to update their own procedures.
More of these companies will start to ask what the user wants to happen to the account and content if they die or become incapacitated. That will hopefully remove some of the issues that an executor has to deal with.
Given the fact that most of the companies I have mentioned today are headquartered in the USA, and in particularly California, it is only to be expected that the US is already looking at the issue of a uniform approach to their terms and conditions when an account holder dies.
The US Uniform Law Commission is looking at giving authority to the next of kin to access, manage, distribute, copy and delete digital assets.
These companies will also continue to be pressed to update their policies on bullying, stalking, privacy and security.
More companies will specialise in tracing digital assets and retrieving the content. For a fee of course.
More companies will also specialise in “tidying up” a person’s digital legacy. Again for a fee.
More people will pay companies to store their digital content.
Closer to home the Scottish Government will I am sure update its publications such as: “What to do after a death in Scotland” to make mention of some of the issues associated with digital assets. The Crown Office, OPG Scotland, The Law Society of Scotland and HMRC will continue to issue guidance.
It will become more common to name a digital beneficiary in our Wills.
It will become common to specifically state that the executor should deal with social media accounts.
Powers of Attorney powers will specifically refer to social media accounts.
There will be more disputes as to who had and who did not have the right to access online accounts.
Our Wills may also change. Can you imagine a digital Will with an inventory section that can be updated easily online and with links to specific instructions you have given to different service providers.
Again something to ponder.
Thank you.
Questions.
