Did you get any digital gifts this Christmas?
Whilst Christmas shopping a few weeks ago, I was struck by the array of digital gifts available at every checkout. Wherever I went there were i-Tunes vouchers, Kindle gift cards, online gaming credits and digital magazine subscriptions waiting to be bought. And it got me thinking about these digital assets and what giving and receiving such gifts actually means.
The essence of this is whether we actually own these digital assets and whether we can pass them on to our loved ones when we die. Whereas people carefully consider their physical assets and who they would like to leave them to, many don't consider their digital equivalents and what needs to be done to ensure these often highly-valuable accounts and collections do not die with them.
Many of these assets, such as Kindle e-books, cannot be passed on to your beneficiaries when you die. You only buy the right to use the files in your lifetime. However, some other accounts, vouchers and loyalty points can be passed on if the right procedures are followed.
The problem is that, although providers are getting better at setting policies for what happens on an account holder's death, there is no standard procedure and no automatic right to pass on a digital asset. It is therefore increasingly important that you read the terms and conditions of your accounts to find out what would happen to the asset and what your executors would need to do to get access to your accounts. You should also consider securely storing a list of your account passwords for your executors to access on your death. This is important not just for accounts with a monetary value, but also to ensure your social media is dealt with appropriately on your death. At Blake Morgan, we store clients' Wills in our strong room and can similarly store such passwords with your Will.
In the longer term, lawyers and governments are working together to find a co-ordinated solution. Our Succession and Tax specialists at Blake Morgan are central to these developments, as a member of an international working group looking into digital assets. The group recognises the need for a global approach on these issues and is made up of practitioners from a number of jurisdictions including Australia, the US, Canada and the UK. They are collating evidence and developing recommendations for government to inform this much-needed legislation in each jurisdiction.
For more information on managing your digital assets please contact the Succession and Tax team.