Business Technology

What are your digital assets worth?

9 min read

06 March 2014

Gone are the days of simply leaving physical assets to beneficiaries in your will: most people now hold an increasing proportion of their assets and correspondence virtually.

But with such a growing proportion of assets being held digitally, how can precious property be handed down – and to what extent is this process adequately dealt with by current law?

It is no longer the case that you only have a physical music collection, library of books or indeed cash (whether in a bank account or physically). These days, most of us have eBooks, iTunes and, in some cases, online assets with considerable value. In fact, a recent poll undertaken by leading cloud computing company Rackspace showed that 53 per cent of those polled had ‘treasured possessions stored digitally’ which were estimated to total £23m.

Passwords in your will

Although digital inheritance may appear simple, with the solution being to include full details of your relevant usernames and passwords in your will, this is not always the most practical method, and in some cases may not be legally possible.

The first issue relates to including your username(s) and password(s) in your will, as this can later become a publicly accessible document when in probate and your details will be available to anyone seeing the will. A safer option would be to refer to a sealed envelope, which may be handed to your lawyer and stored with your will. This document does not become public and so will remain completely confidential. 

There are also a number of companies who will retain your confidential, sensitive information and will only disclose it upon death in accordance with your instructions. However, even if all the necessary information is provided to the beneficiaries, in some instances they may not legally be able to benefit from those assets.

Contrary to popular belief, you do not ‘own’ the majority of your digital assets. Instead, you are usually granted an ‘End User Licence’ by the owner of the digital asset to use during your lifetime. In most cases, these licences specifically prohibit the assignment to another person. For example, Apple’s terms and conditions contain the following clause: ‘You may not rent, lease, sell, transfer, redistribute or sublicence the Licensed Application and, if you sell your Mac computer or iOS device to a third party, you must remove the Licensed Application from the Mac Computer or iOS device before doing so’.

Apple is not alone in this provision, which is replicated in a number of other digital brands such as Amazon Kindle. While there is nothing to stop people leaving their computer or tablet to any person in their will, these terms and conditions prevent that person from legally having access and being able to use the digital assets accessed through or stored on those bestowed devices.

The value of virtual goods

In recent years there has also been an increase in ‘virtual goods’ that can generate billions of pounds of revenue each year. Put simply, virtual goods are non-physical, abstract objects that are traded in online gaming communities but do not equate to physical wealth. However, there have been notable exceptions to this, which mean that virtual goods and their value may need to be considered in an individual’s estate upon death.

A prime example of this can be seen with online games such as Entropia Universe and Second Life. These allow players to own in-game currency by trading and purchasing virtual goods to make a profit – which can then be converted into real currency. In 2010, a player of Entropia Universe set a new world record for the most expensive virtual item purchased, buying the Crystal Palace Space Station for the equivalent of US$100,000.

This case highlights the potential value of digital assets. However, much like Apple and Amazon, the participation in this game is through the granting of an End User Licence Agreement, which the user is prevented from transferring and so the value of these assets is lost as they cannot be passed on, and the terms and conditions state: ‘No transfer of licence. The Participant may not sell, lease, sublicense or otherwise transfer any rights to the Entropia Universe System to third parties’.

Image source

Access to accounts

Given the obligations of confidentiality, which survive death, there is no specific right for any beneficiaries to be granted access to the deceased’s email or social networking site. To date there has been very little UK case law in relation to this point. 

However, in the US the case of Benjamin Stassen received widespread media coverage as Benjamin’s parents sought an order against Facebook and Google to allow them access to his account and online assets after his suicide in late 2010. Much of his personal information was stored digitally and, as he had not made a will, his parents were unable to gain access to that information or assets.

Facebook has a duty to uphold its customers’ privacy and so does not provide access to an account after that person’s death. However, the Facebook page can be altered to a memorial page, but no direct access to amend the page in any way is granted. Similarly with email accounts such as Gmail – relatives and beneficiaries have no right to require that they are given access to a person’s account upon their death, as this would be contrary to the commitment that the provider has made to its customer.

In the Benjamin Stassen case, his parents resorted to taking legal action against both Facebook and Google to obtain access to their son’s private accounts and digital assets. They successfully obtained a court order against Google, ordering it to release all of Benjamin’s email records.

The Court also made an order against Facebook, in which it released the company from its confidentiality obligations to allow access to be given.

Since then, Google has recently announced that its users are able to specify ‘trusted contacts’ who can access their accounts after they die, or can request to have their accounts deleted. However, this still requires that the individual specify this option and leave relevant instructions.

Lasting legacy

Although the Benjamin Stassen case is an American example, it does set a strong precedent for how similar situations would be dealt with in the UK. It is likely that without express instruction by an individual, which allows relatives or beneficiaries access to their digital accounts and assets, access will be denied on the grounds of confidentiality.

While some digital assets may be left to beneficiaries, other such assets are not legally able to be bequeathed. One thing is clear however: it is evident that the law has not caught up with this development and without further case law, or legislative change, considerable legal uncertainly looks set to remain in this field. So, in the meantime – keep a clear record of your passwords and usernames, lodge these in a sealed envelope with your lawyer and ensure that your will reflects your wishes.

Claire Green is a specialist technology lawyer and Emma Parsons a private client lawyer at leading law firm Taylor Vinters at Taylor Vinters LLP.