Spear's Wealth Management Survey

Acknowledging and protecting the value (real or sentimental) of virtual profiles and other assets is an issue that has only begun to immerge in recent years. The increased use of social networks, blogs and gaming sites makes it ever more important that the Law is clarified in this highly uncertain area.

As yet there is no standard way of dealing with such assets. However, what is clear is that where there is a recognised value those assets may form part of your estate for tax purposes on death. So far as possible, you should also take steps to protect that value during your lifetime, so that loved ones can benefit if anything happens to you.

Internet Service Providers may seek to allege that profiles cannot be traded and accounts simply terminate on a user's death. The only test case to date on this point involved the Yahoo account of Lance Cpl Justin Ellsworth, who was killed whilst serving in the Middle East. Yahoo!, adhering to their terms of service, refused to give Lance Cpl Ellsworth’s family access to his password or correspondence on the basis of privacy. However, following a Court Order, Yahoo! released the correspondence to the family.

Similarly, although there have been some attempts to ban the sale of virtual assets, online market places now exist to provide a trading platform. For example, Live Gamer Exchange is an online marketplace providing a platform whereby the sale of goods acquired within Sony’s own games (such as Everquest, Everquest II and Star Wars Galaxies) can be traded legally.

Preserving and transferring the value of virtual goods and profiles is a three stage process as follows:

1.    Digital Inventory – individuals should start by completing a spreadsheet, listing all your digital assets, profiles, email addresses, devices, and gaming accounts. If no one knows about them then they can’t be preserved. In each case you should list user names, type of digital media and most importantly state what your wishes are in relation to it. You could include access information in this spreadsheet, but from a security perspective this might not be wise.

2.    Digital Will – once you know what you have you need to appoint executors to deal with your digital estate. The executors will be responsible for gaining access and, where relevant, shutting down or passing over each account to the relevant heirs. Your digital heirs, also appointed under the Digital Will, may then be responsible for carrying out your wishes, maintaining and updating accounts and profiles accordingly.

3.    Password Storage – strictly speaking, if steps 1 and 2 are completed then the ISP ought to provide your digital executors with access information. You could avoid any delay or uncertainty by storing all your passwords and other access information on one of the sites such as Legacy Locker and Deathswitch. Such websites allow users to upload their personal login details and passwords, which are then released to your executors after your death. Concerns have been raised about the long-term security of such sites. A cheaper alternative would be to store the information on a separate document in your computer. You then only have to make your computer password available your digital executors on your death.

Nicola Plant
E-mail: n.plant@pglaw.co.uk
Direct Dial: 020 7591 3314
www.pglaw.co.uk

Answered on Monday, 16 January 2012