The Property (Digital Assets etc) Bill was introduced in Parliament in September 2024. Now at its second reading, the Bill aims to update existing laws to formally recognise digital assets as a distinct form of personal property.
Gemma Bryan, senior paralegal in the Private Client team at Lodders, explains the Bill and provides advice for planning your digital legacy.
Today, much of our personal lives – photos, documents, certificates, and memories – are stored digitally, on phones, laptops, and in the cloud. When these were kept as physical objects, they would be relatively accessible to loved ones after a death. With digital assets, it is not as straightforward or easy for beneficiaries and family to retrieve them without digital legacy planning.
However, the Property (Digital Assets etc) Bill is set to change that. First proposed following the Law Commission’s consultation and report on digital assets in July 2023, the new Bill recommends a ‘third category’ of property to accommodate digital assets.
Why is the Property (Digital Assets etc) Bill needed?
Traditionally, under the law in England and Wales, only two categories of personal property have been recognised:
- Things in possession (something tangible you hold or own)
- Things in action (a legal right or claims to something)
Many digital assets today hold financial value but do not clearly fit into these two descriptions of personal property, particularly ‘newer’ types of digital assets. Indeed, the Law Commission report provides examples of what may be considered as digital assets, including digital files and records, email accounts, crypto-tokens, Non-Fungible Tokens (NFTs), and in-game digital assets.
The Bill aims to provide a clearer legal basis for how these assets should be distributed or safeguarded upon death, ensuring individuals’ digital legacies are protected. It also aims to assist judges in dealing with court cases where digital assets are disputed or form part of settlements.
What is a digital legacy?
A digital legacy is any information or documents you leave behind online when you die. Think of it as your personal identity that lives on a computer and/or in the cloud, which includes:
- Email accounts
- Social media accounts
- Bank, investment and utility accounts
- Cloud storage accounts
- Customer accounts such as Amazon or eBay
- Websites and blogs
Your online accounts and everything in them are known as digital assets, which are protected by usernames, passwords and privacy controls, making them difficult for others to access without clear instructions. A digital legacy allows you to create a record of instructions to enable access for your beneficiaries, and instructions for how you want your online accounts, personal files, documents, and social media profiles to be taken care of.
Many online platforms recognise the importance of this and allow account holders to issue instructions of what should happen to them in the event of your death. For this reason, a digital legacy is increasingly considered a standard, normal part of a written will.
Tips for planning your digital legacy
It is best practice to approach digital legacy planning in a similar way to when writing or updating your will:
- Choose a digital executor
- List your online accounts, platforms, websites and so on
- Document your digital wishes
- Store your digital wishes and let your solicitor and loved ones know where the document is and how to access it.
Digital legacy planning can be difficult, but it will make life easier for your digital executor to view and access your photos, files, messages, apps, websites and other data, and in turn decide what should happen to them in line with your instructions.
Support with your digital assets
Whilst not yet law, the new Bill represents a landmark shift in the way digital assets are recognised, and we will closely follow ongoing developments.
If you have any questions about digital assets, or wish to review your will, our experienced Private Client team is here to help. Get in touch with us here.
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