Crossed wires

Passwords and codes are now part of everyday life. Technology and the growth in conducting transactions on the internet means ?that our online presence is increasing daily. This web presence ranges from ?the use of online social websites for personal and business purposes, to the ever-increasing numbers of consumers whose spending has shifted from the high street to the internet. Passwords ?are important to ensure privacy and security, but this could lead to a conundrum for those dealing with the estates of those whose assets include online possessions.

Some believe the solution to this problem is for passwords and the means of accessing online possessions and resources to be included in wills. However, while in theory this may appear sensible, there are some good reasons for not passing on password information through this medium.

Public record

One of the main reasons is that passwords are intangible and are subject to change quite frequently (as indeed may be the underlying accounts or other assets). There is also the aspect, albeit one which can be readily addressed, of confidentiality, as wills are a matter of public record once grant of representation has been obtained.

There are generally three different types of online possessions. They can loosely be categorised as:?

• those of sentimental value;

• those that may have monetary value; and

• assets which appear to be held online, such as savings or bank accounts, but are in fact an extension of a main entity that is not actually web based. ?

Possessions of sentimental value can include things like the testator’s social networking accounts which, although may be of significant value to family and friends, would be unlikely to have monetary value. Ownership of videos or music created by the testator and placed online lies in its copyright rather than access to the account.

While it is easy to dismiss sentimentality, it is certainly of importance from the point of view of those closest to the testator, especially where the deceased died under unexpected, traumatic or sad circumstances. A recent BBC report has highlighted this issue and commented on the fact that a number of states in the USA are contemplating the introduction of legislation dealing with online information after death.
Subject to the introduction of any legislation or codes of conduct relating to this category, the only common theme throughout has been the fact that social networking providers do not appear ?to have a consistent approach to dealing with personal representatives and ?may therefore cause unnecessary grief ?or confusion.

Online possessions of the deceased that are potentially of monetary value may include music, e-books, assets that have been accumulated in gaming which are either won or purchased, pictures and videos. It is difficult to place a true value on such online content. A digital music collection, the accumulation of which may have cost a considerable sum, may not actually have much value.
There is also the question of whether the interest in such digital possessions can be given away as, unlike CDs or DVDs, there may be ambiguity as to what the testator owns. Indeed, the terms and conditions under which the online content is purchased may also be relevant as there may be restrictions on transferring that content (which in turn leads to the question of whether those terms are unfair or anti-competitive).

Cloud cover

A further aspect to consider is works of artistic value, such as unpublished books, film scripts yet to be made, and musical compositions, which may have significant value and are stored in cloud-based storage facilities. Rather than leaving passwords in a will, the solution may be to deal with such online possessions as chattels and pass them on as specific gifts with a letter or note to be kept with the will with the relevant passwords. It should be noted that while a password may give access to such online accounts, the reality of giving effect to the testator’s wishes may be far from straightforward.

The third category, of online bank and credit accounts, has the appearance of being to do with online possessions but is, in fact, a means of accessing assets held by the organisation that lies behind the web presence. The normal procedures when dealing with personal representatives would apply and should be quite straightforward, as long as the relevant forms of authority can be supplied.
The same can be said of credit providers who give and maintain a significant web-based image. Online gambling accounts that may be in credit should for the most part be dealt with on a similar basis, unless the organisation is based in a jurisdiction other than the UK and whose requirements may differ to organisations based locally.

The position in respect of the first two categories remains unclear and, until a uniform approach is taken by those providing services for online possessions, uncertainty will prevail.

The third category is unlikely to cause much difficulty, but there is then the question of whether it is appropriate for personal representatives to gain access to the deceased’s assets by way of the web portal rather than the traditional channels. Furthermore, the closure and encashment of bank accounts, even if it is one purported to be web-based, will still require production of the relevant grant of representation. In addition, the personal representative would require information on tax deductions, closing balances and so on.

Virtual world

A significant problem that could arise with online accounts is the lack of any physical evidence of their existence. The demise of passbooks and the option to not receive paper statements means that some form of record kept with the client’s papers indicating the existence ?of such accounts is advisable.

Attention should also be given to what should happen when the owner of online possessions and bank accounts loses the capacity to deal with these assets. A lasting power of attorney (LPA) should be created to enable someone who is trusted to deal with these ?online possessions.

While this article concentrates on passwords relating to the internet, it is important to not overlook passwords for electronic devices such as home computers where important information and sometimes valuable works are stored. For example, the artist David Hockney has taken to working on an iPad, which is doubtless password protected.

There is a particular problem in relation to categories one and two above. The inclusion of passwords in a will should be avoided. If one is inclined to do so, a clause dealing with the online possessions that lie behind the password may be more suitable.

A record of the means to access these possessions can be kept either with the will and updated regularly (without incurring the cost of changing the will) or even better, with an LPA stored with the will. If an LPA is in place, and death is not sudden, the appointed attorneys can deal with matters prior to death and so avoid the conundrum altogether.

Francis Durrant is a partner and Luck Luck Ooi a solicitor at Barr Ellison