Concept for - Digital Legacy

In an era where digital assets have become interwoven with almost every aspect of our personal, professional, and creative lives, the question of what happens to our online presence and digital property upon death or loss of capacity is more pressing than ever. For individuals and families in England and Wales, the way digital assets are incorporated into estate planning is evolving rapidly, especially with the current intentions of the Property (Digital Assets etc) Bill 2024-25 (Bill).

At the date of writing, the law in England and Wales does not specifically recognise digital assets as forming part of the two established categories of personal property: choses in possession (tangible items, like jewellery or cars) and choses in action (intangible rights, such as debts or shares). Because digital assets, such as cryptocurrency, social media accounts, cloud storage, and digital art do not fit neatly into either category, they fall outside the conventional scope of what is considered property for succession purposes.

This legal gap means that, under the present law, digital assets may not pass to heirs under the intestacy rules if someone dies without a will (or without a will that adequately deals with such assets). Executors and beneficiaries can find themselves in a complex and uncertain position, as access to and ownership of these assets may be restricted or unclear. Many service providers’ terms and conditions do not allow accounts to be transferred unless there is a legacy contact, and there is no automatic right for executors to access them. As a result, valuable or sentimental digital property can be lost or left in legal limbo.

The proposed Bill, which comes following the Law Commission’s recommendations in 2023 and 2024, seeks to address this issue by creating a new, third category of personal property specifically for “digital assets”. This statutory change is intended to clarify that digital assets are recognised as a distinct form of property, capable of ownership, transfer, and succession. If the Bill is enacted, digital assets will, for the first time, be clearly capable of passing under a will or the intestacy rules, just like physical possessions or other intangible rights.

This new category should bring welcome certainty to executors, beneficiaries, and service providers, ensuring that digital assets are no longer left outside the estate and can be distributed according to the owner’s wishes or the statutory intestacy rules if there is no will. In turn, this recognises the growing importance of digital assets in modern life and estate planning.

Understanding digital assets in the modern age

The term “digital assets” is not defined in law but is often understood to encompass a broad array of property in digital form. These may include, but are not limited to:

  • Email accounts, cloud storage, and social media profiles
  • Cryptocurrencies and digital wallets (e.g., Bitcoin, Ethereum)
  • Domain names and websites
  • Gaming accounts and digital collectibles (NFTs, in-game items)

The value of these assets can be significant, both financially and sentimentally. Yet, they are often overlooked in traditional estate planning, creating complexities for executors and families, and sometimes resulting in loss of valuable property or treasured memories.

Much needed clarification

The Bill marks a watershed moment in the recognition and treatment of digital assets within English law. Below are some of the impacts the Bill is likely to have if enacted:

  • Legal recognition: Digital assets are recognised as property in their own right, capable of ownership, transfer, and succession.
  • Executor access: Provides a clear legal pathway for executors and administrators to access, manage, and transfer digital assets, subject to privacy and data protection safeguards.
  • Clarity for service providers: Requires digital service providers to cooperate with executors, subject to appropriate safeguards, and establishes clear procedures for disclosure and transfer. While technology companies such as Apple and META have already introduced “legacy contact” features that allow designated individuals to access digital accounts after a user’s death, these systems have existed in the absence of a comprehensive legal framework. The Property (Digital Assets etc) Bill 2024-25 should fill this gap by empowering executors and administrators to access and manage digital assets – especially in cases where digital legacy preferences have not been set up by the testator—ensuring that digital property is not left inaccessible or unresolved.

While the Bill provides a much-needed clarification, several practical challenges remain:

  • Rapid evolution of technology and digital asset types continue to outpace legislation
  • Cross-jurisdictional issues where assets or service providers are based overseas
  • Data protection concerns, especially where sensitive personal data is involved
  • Possible disputes over intellectual property, particularly in complex digital estates

So, what should you do?

Everyone should take steps to secure their digital legacy, regardless of the Bill. We can assist with identifying and protecting your digital assets to ensure your wishes are followed.

Traditionally, estate planning has focused on tangible property like real estate, physical possessions, and financial investments. However, the digital transformation of society has made it essential to consider digital assets as part of one’s legacy. Failing to address digital assets in a will or estate plan can lead to:

  • Loss of access to valuable or sentimental digital files
  • Legal disputes over ownership and control
  • Unclaimed online accounts or assets left in limbo
  • Inability to enforce copyright or intellectual property rights

For creators, entrepreneurs, and even everyday users, the digital legacy is now inseparable from overall legacy planning.

Ongoing review of estate planning documents and legal guidance is essential to ensure your digital legacy remains secure and up to date.

By taking proactive steps like identifying digital assets, updating estate plans, understanding intellectual property rights, and communicating intentions, individuals and families in England and Wales can take proactive action to preserve and protect their digital legacies for future generations.

If you would like tailored guidance on digital estate management or have questions about protecting your digital assets, please reach out to Georgina Carter, Senior Associate in our Private Client team, or Amy Ralston, Associate specialising in Intellectual Property, Data Protection and Technology. Their expertise can help you navigate the evolving digital landscape and ensure your legacy is preserved with confidence. Or call 0345 540 5558 to discuss further.