Digital Assets
20 November 2023
A Sobering Tale
In 2013, James Howells tidied his home office and placed a number of items into a bag, which he left at the front door of his house. The following morning, he awoke to find that his partner had taken the bag to a landfill site. The bag included an old laptop which contained the access keys to 8,000 bitcoins, which is the world’s leading cryptocurrency. Mr Howells estimates the bitcoins are worth £165 million. He has tried to convince Newport City Council to help, or allow him, to search through the landfill but has, as yet, been refused access.
Digital Assets
Almost all of us have some digital assets, which are possessions that are accessed on a digital device, for example a photograph stored on a laptop or a social media account. These assets are not limited to those of sentimental value; some digital assets are of financial value, for example the Instagram accounts of social influencers which can generate significant income for the influencer or investments in cryptocurrency (which has moved from the fringes into the mainstream of financial investments).
Digital assets can be difficult to deal with when an individual dies and require some thought when an individual is making a Will or Lasting Power of Attorney. They are often subject to the standard contractual terms and conditions of the relevant Internet Service or account provider. It is often the case that limited or inadequate information is provided concerning how digital assets are transferred on death. An account may be terminated, it may allow an individual to be selected during the account holder’s lifetime (for example, Google’s Inactive Account Manager or Facebook’s Legacy Contact) or the account may be memorialised for a brief period (after death).
To share or not to share…
The innocent account holder may think that providing a trusted individual with their password is sensible planning. It is not.
The majority of internet service or account providers are US-based and subject to US privacy laws, which makes the provider liable if unauthorised access is provided to an account. The concern for the provider is that unauthorised access to passwords may lead to hacking, which may itself create losses for which it is potentially liable.
In addition, the Computer Misuse Act 1990 provides that unauthorised access to ‘computer material’ is an offence and parts of the Proceeds of Crime Act 2002 make it an offence to acquire criminal property or not to disclose dealing with criminal property.
What can I do?
You should record relevant and useful information concerning your digital assets in an inventory. The inventory should list the assets and provide, for example, usernames. The inventory should not include passwords.
You should investigate the terms and conditions of their internet service or account providers and make use of any legacy-planning tools offered (for example, Apple offers a Legacy Contact facility). The terms and conditions of loyalty cards should also be investigated.
Digital assets such as photographs could be copied electronically or physically, to allow access and distributions after death. This has the additional advantage of possibly dealing with any disputes between beneficiaries concerning sentimental items, such as photographs.
How should passwords be stored?
Passwords or keys to cryptocurrency can be stored in a third-party facility, with access limited to the owner and those to whom they have granted access. These are often described as a ‘digital assets vault’.
Whilst James Howells’ example is extreme, planning is important when considering how you would like your digital assets to be dealt with.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.