Death, data and the internet: Managing your assets in the digital sphere

Social media, cloud computing, photo sharing, email – these are just some of the ways we communicate, store and send information.

It is a gloomy question, but what happens when we die? Where does the data go?

In too many cases, it is lost because other people can’t access or find it.

This can mean family members lose access to a loved one’s photos or music and may struggle to remove unwanted material from online. For business owners, the consequences can be just as severe.

Succession planning is not the only issue business owners need to think about should they pass away. A portion, often large, of the company’s digital history and assets can be hard to access. This impacts a business’s likelihood of survival, causing disruptions to client relations and services, a loss of time and resources and possible long-term or permanent halts on major projects.

University of Warwick research published in January this year found the death of an entrepreneur (with at least a 50% share in the business) results in a 20% lower survival rate for the firm two years after the event. It also found a strong negative effect on sales and assets.

One explanation of the results is that death creates turbulence; however, if this were simply the case there would be a reversal of the firm’s performance overtime. In contrast, the immediate effect of an entrepreneur’s death is “quite modest” compared to the “the sustained effects that accumulate”.

While the study did not determine a definitive answer for the drop in firm performance, further research into the effect of a business owner’s death and the transfer of digital assets from one party to another suggests this could be part of the cause, particularly for small businesses.

SmartCompany spoke to Melbourne University researchers Dr Martin Gibbs and Dr Michael Arnold, Holding Redlich information technology and intellectual property lawyer Trent Taylor and Australian Consumer Communications Action Network (ACCAN) deputy chief executive Narelle Clark about how to manage your digital assets in the event of an unexpected death.

Digital assets

Taylor says the first issue to consider is defining what counts as a “digital asset”.

“From a legal perspective the difficulty is there is no real definition of what a digital asset is,” he says. “United States commentators have suggested it could be any file on a computer hard drive or on an online account or management system. This suggests all online files, photos, videos, books and videos are all assets.

“It also means email and social media accounts are assets, as are banking and credit card accounts. It’s not like the good old days when there was a big pile of paper sitting in your in-tray or you have a photo album of pictures. Everything is in the cloud and this leads to complications.”

Legal issues and cases

Clark says death and inheritance laws are inconsistent between Australian states and territories, meaning there often isn’t a person automatically left in charge of digital assets.

“In some states of the USA it is automatic that the next of kin has control over digital accounts after death. We are yet to see that provision available here,” she says.

Privacy is another hotly debated issue in terms of the transfer of account details (for sites such as Facebook) in the event of death.

Not yet a major issue in Australian courts, in the US a case emerged in 2005 regarding the death of marine lance corporal Justin Ellsworth who was killed in Iraq. Ellsworth’s parents wanted access to their son’s email account to create a record of the personal emails he sent them while on tour.

When Ellsworth’s father requested access to his son’s Yahoo! email account, Yahoo! refused. The case went to court and Yahoo! was ordered to deliver the contents of Ellsworth’s account. The case sparked a conversation about leaving behind online passwords.

At the moment Facebook is the only social media site to clearly articulate policies and provide services for the memorialisation of user profiles.

“Facebook have a policy where you can request an account to be memorialised or deleted in the event a person’s death,” Taylor says.

Google was also prompted to institute a new policy where in exceptional circumstances they will grant another person access to a deceased person’s account. But this can be difficult to achieve.

Taylor says the issue of privacy is one business owners must also consider.

“One of the big risks with the cloud is sometimes you’re dealing with personal information which could be protected by privacy laws. Businesses need to be careful about what is stored in the cloud and who can access it,” he says.

Read the fine print

Clark says business owners must read the terms and conditions regarding access to accounts before signing up.

“Their business systems need to take into account all the electronic forms their assets take and prepare for any change as a result of death – e.g. if they trade on eBay, or on other online auction sites, will the accounts disappear or be frozen after death?” she says.

“How will these assets be able to be captured and retained so that the business can be sold, wrapped up, or continued by your heirs? The rules of access are set out in the specific terms of use of the various systems you use. It is important business owners read these and this will guide the sorts of procedures to put into place to ensure access is available after death.”

Clark says ownership issues are generally discernible from a website’s terms and conditions, but there is no uniform approach.

Small retail businesses frequently rely on sites such as eBay or Facebook to sell their products, so it’s vital to make sure a trusted person either has the access details to your account, or there is a policy in place with the site which allows it to be transferred in the event of death.

“It is also important to have strong systems in place to ensure security and reliability: good back-up procedures, good password systems, and back up access for your key people, such as alternative systems administrators and alternative ‘super users’, or through ‘sharing’ settings depending on the system,” Clark says.

“That way, a business owner’s trusted people can get access to systems should the worst occur.”

Businesses are generally covered if they have their own email system, as they’re able to create their own policies. But problems emerge when business owners and employees use work and personal email accounts interchangeably.

“It is good practice to ensure that business records are copied across to business systems. At least with email it is as simple as forwarding to the business account and then archiving and responding appropriately. Then, at least, there should only be a small number of messages that could be lost after a person’s death. Once again, if provision has been made for a person’s executor to have access to their personal accounts, then business messages can be dealt with effectively.”

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