From banking and social networking to storing pictures and listening to music, we can do everything digitally these days. But what happens to these digital assets and online accounts when we die? Moneywise investigates
Just one in four (23%) adults has organised their financial information well enough to allow their loved ones to handle their financial affairs relatively easily on death, while more than one in 10 (12%) admitted that it would be very difficult for anyone to handle their financial affairs after they died.
These were the findings of research published earlier this year by financial provider Royal London. But to complicate our financial information further, we now live in a digital world where paper trails aren’t left as handy clues for executors trying to sort out the wishes laid out in wills.
Gary Rycroft, a partner at Joseph A. Jones & Co Solicitors in Lancaster, explains: “Back in the day, it was easy for executors to track down assets as there was physical evidence such as paper bank statements and share certificates.
“While the legal advice hasn’t changed in needing to make a will, you need to expand on it and think about what life entails now.
“The big issue that the digital world throws up is that people don’t know where to look – it’s just a black hole. Where are people’s online bank accounts?”
However, it’s not just the obvious financial accounts, such as your online banking or share trading and investment accounts that you need to consider. There are also the accounts that aren’t financial but still have a monetary value, such as loyalty schemes and cashback sites. According to cashback website TopCashback’s ‘Loyalty after Death’ report published this spring, 60% of people have not made their family or friends aware of the loyalty programmes they belong to.
The report also revealed that the majority (91%) of people do not have a plan for their loyalty schemes, and nearly half (47%) had not even considered it as an option.
It’s a similar story when it comes to social media accounts. Unless you’re an Instagram or YouTube star these are unlikely to have a monetary value, but it’s still a personal choice as to whether to keep these open, and not enough of us are recording these decisions before we pass away.
James Norris, founder of The Digital Legacy Association, a professional body that works with charities and organisations to raise the quality of end of life care in areas relating to digital assets and digital legacy, says: “The ways in which we remember our loved ones has changed. For many people, Facebook and other social media sites become a focal point where we remember, view photos, and discuss the life of our loved ones.”
Yet, according to The Digital Legacy Association’s ‘Digital Death Survey 2017’, only one in 10 (13%) has made plans for their social media accounts following their deaths.
What happens to your digital assets
Once they have found your digital assets, it’s up to executors of your will (or administrators if there is no will) to ask providers and financial institutions to close any online accounts you have, with any remaining balances or assets distributed according to the will if there is one, or according to intestacy rules if there isn’t.
Executors will probably need to provide evidence, such as a death certificate and/or a probate certificate. But the problem is that every provider has different rules.
When it comes to banks and building societies, for example, the largest firms follow the ‘Bereavement Principles’ – a code of practice drawn up alongside industry trade bodies.
Under this guidance, a one-stop notification system enables providers to notify relevant brands about specific accounts and products under the deceased’s name with one single notification.
Upon notification, restriction to sole accounts is limited to the person responsible for dealing with the estate. Assets will be released once all supporting documentation to confirm the death and the appointment of the executor or administrator has been provided (although firms will allow payments to be made from the deceased’s account beforehand to cover funeral costs, probate fees, and inheritance tax payments to HMRC).
Loyalty providers, meanwhile, can set their own rules on whether points or cashback accrued can be passed on when you die.
Leigh Sagar, a barrister at New Square Chambers in London and member of STEP (the Society of Trust and Estate Practitioners), explains: “In legal terms, a consumer is entering into a contract with a company when joining a loyalty programme. The contract is not an onerous one, but it does contain certain terms and conditions that will be enforced by the court. These terms normally provide that only the registered user, or in some cases, persons in the same household, can collect and spend loyalty rewards.”
Six out of seven major providers Moneywise spoke to do allow loyalty points and outstanding balances to be transferred to someone else, but even then the executor often must provide legal documents to validate their claim and some providers will wipe balances if you don’t act fast enough (see table below).
| Provider | Can you transfer loyalty points or account balance on death? | Additional info |
|---|---|---|
| Avios (formerly known as Airmiles) | No | While Avios' Ts&Cs state that unused points are cancelled after a member's death, it told Moneywise it will consider transfer requests on a "case by case basis" |
| Boots Advantage Card | Yes | Evidence isn't required but certain security questions will have to be answered |
| Nectar | Yes | Whether evidence is required depends on whether the executor is an additional cardholder on the account and how many points have been collected |
| PayPal | Yes | What evidence must be provided depends on whether the account balance is above or below £5,000. As a minimum, a copy of the will is needed (if there is one), plus an original or certified copy of the death certificate, and government-issued ID of the executor or administrator |
| Quidco | Yes | Death certificate and letter of probate must be provided. Any balance is lost if an account is dormant for six months |
| Tesco Clubcard | Yes | Evidence isn't required |
| TopCashback | Yes | Death certificate or will must be provided |
| Source: Moneywise, 9 November 2017. | ||
How to protect your digital assets
The least you can do to help your executors with a potentially tricky journey ahead is to provide a roadmap of what you want to happen to when you die. Mona Patel, Royal London’s consumer spokesperson, says: “While it’s not nice to have to think about dying, the last thing you would want is for your family to struggle to locate and deal with your assets.”
Mr Rycroft’s advice is to make a will stating how you want your financial assets to be distributed, and who you want to do this. He then recommends writing a digital directory that is kept with your will where you detail every online account you have stating: the website address, your username, and your instruction upon death eg, close the account.
“This isn’t part of the will,” says Mr Rycroft. “But it should be kept with the will. It’s a living document as it gets updated all the time whereas wills you might make every 10 years. So you need to keep a copy at home and regularly update and review it.”
However, he warns that you shouldn’t write down passwords as that’s a security risk.
You also shouldn’t log in to someone’s accounts or computer using their details as this is a criminal offence under the Computer Misuse Act 1990, according to Mr Rycroft.
Digital downloads can’t be passed on
Sadly, not all digital assets can be transferred in their digital format. Mona Patel, Royal London’s consumer spokesperson, explains: “Many people might be surprised to learn that purchases such as e-books and digital music cannot be passed on, as the right to access them lies only with the owner.”
Solicitor Gary Rycroft adds: “With downloaded items, such as films and music, you’re buying a right to listen to the music for the duration of your life, but you can’t assign that right to anyone else on your death.”
This may hit millennials particularly hard, with Royal London estimating that over the course of a lifetime, someone aged 34 today could build up a digital legacy worth up to £7,700 which cannot be passed on to friends and family.
However, there is a way around this. Mr Rycroft explains that if you download the films, music or e-books onto an external hard-drive, MP3 Player or Kindle, you could then pass on this tangible asset. You’re not however, allowed to pass on these assets digitally – say via email.
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