Industry NewsPropertyWillsThe Dilemma of Defining Digital Assets

7th May 2021Siobhan Smith0
https://i0.wp.com/www.willwriters.com/wp-content/uploads/2021/05/Digital-Assets.jpg?fit=1200%2C644&ssl=1

With the news that the Law Commission have last week launched a call for evidence into digital assets and that these types of asset will be the focus of one of the daily themes during Dying Matters Awareness Week (running 10th -16th May) now seems a good time to think about what digital assets are in the context of estate planning.

At the moment the amount and variety of digital assets and the amount of life and business conducted online is rising quicker than the law seems able to keep up. For this reason, there is little in the way of guidance on how to deal with digital assets when a person dies. From whether a digital asset is a possession that forms part of the estate to whether an executor can access online accounts to deal with them there are areas of uncertainty.

Stop for a moment and ask yourself how much of your life is online now? Both personally and in the course of your business you may manage a lot of your life digitally. You might use Instagram to keep your family updated on your holiday snaps or have a Facebook page that you market your business through. Maybe you invested in Bitcoin or other cryptocurrencies? Perhaps you even run a monetised blog that you write regular articles for.

The next question then, logically, is which of these things are ‘digital assets’? Which of them do we actually own in a way that allows us to pass them on and how do we practically go about doing that? The term ‘digital assets’ in itself is problematic. It is clearly too vague. The Law Commission in their “Making a Will” consultation paper recognised this and declined to attempt to define digital assets formally. They took the approach of using the term digital assets as a collective descriptor of the various assets and rights that typically are referred to as digital assets.

In their recent call for evidence the Law Commission clearly recognise the importance of legal clarity when it comes to digital assets and make the point that technological advancement is only set to continue so these types of asset need recognition and protection. They raise the following example:

“…the law recognises that a digital asset can be property and that a digital asset can be “owned”. However, it does not recognise the possibility that a digital asset can be “possessed” because the concept of “possession” is currently limited to physical things. This has consequences for how digital assets are transferred, secured and protected under the law.”

The STEP Digital Assets Working Group (DAWG) take the approach that the term digital assets cover two very different sets of assets and have defined these two categories as follows:

  • Digital records that we hold and access through computers and other electronic devices. Assets that fall into this category are not giftable at all as they have no true property rights distinct from the device that they are held on. They simply pass as part of the device.
  • Digital property rights and interests. These are part of a person’s estate and can be gifted.

It is clear then that care needs to be taken when defining digital assets within a will, especially if the assets in question are of a substantial value or have intellectual property rights attached to them. Consider whether it may be appropriate to expressly define digital assets and make specific gifts of them within a will, or whether it is appropriate to simply allow them to form part of the residue. Consider further whether a standard clause gifting ‘personal possessions’ should be amended to also include digital assets, as the standard definition includes only tangible movable assets.

We will continue to follow the Law Commission’s progress as it consults on digital assets with interest. No doubt clarification on the law surrounding defining and transferring digital assets will have an impact on how these assets are dealt with by will.

For the Law Commissions call for evidence see: https://www.lawcom.gov.uk/project/digital-assets/

For more information on Dying Matters Awareness Week see: https://www.dyingmatters.org/AwarenessWeek

Siobhan Smith

After graduating from the University of Lincoln with a 2:1 in Law in 2014 Siobhan has dedicated herself to will writing as a member of the Society’s technical team. Siobhan is also the main tutor for the College of Will Writing’s 4 day introductory course, taught monthly at the College.

Leave a Reply

Your email address will not be published. Required fields are marked *

About The Society of Will Writers

The Society of Will Writers is a non-profit making self-regulatory organisation whose primary objectives are the advancement, education and ethical standards within the will writing profession.

Contact Us

The Society of Will Writers
Chancery House
Whisby Way
Lincoln
LN6 3LQ

Tel: 01522 687888
Fax: 01522 694666
E-mail: [email protected]

SWW, logo, white, crest, seal, will, pen, quill, ink, paper, book, scales, legal, blue, gold,

Copyright by The Society of Will Writers. All rights reserved.
Registered in England and Wales. Company Number: 02918900.

Login

Register

If you have not been registered for the SWW members Area, please contact us. Your personal data will only be used for the purposes described in our privacy policy.

Already have account?

Lost Password

Please enter your username or email address. You will receive a link to create a new password via email.