In the age of interstellar connectivity and digital constellations, the management of legacies in the digital age has emerged as a critical frontier for charity legacy officers. Much like charting a course through uncharted space, navigating the legal landscape requires a keen understanding of legislative developments and societal shifts. This note explores the cosmic complexities of these issues, focusing on the evolving legal framework in England while also considering insights from jurisdictions that have already ventured into this domain. As the Law Commission explores these issues, charity legacy officers must prepare for the dawn of a new era in legacy management, embracing the infinite possibilities and challenges of the digital universe.

Electronic wills

Current legal requirements for wills

The law governing wills was enacted in the Victorian era. It is governed by legislation – the Wills Act 1837 – and case law which has been developing for hundreds of years – Banks v Goodfellow was decided in 1870.

These requirements, designed for a pre-digital age, pose challenges in an era where electronic communications are ubiquitous.

The Law Commission’s proposals

Since 2016, the Law Commission has been actively reviewing the law of wills, including:

• the formal and substantial validity of a will, including:
  • the test for testamentary capacity;
  •  the formalities for a valid will (ie section 9 of the Wills Act 1837), including an examination of the issue of a will being made electronically;
  •  the interpretation and rectification of a will;
  • the possibility of a power to dispense with the formalities otherwise necessary for a will to be valid;
  • the age at which a will can validly be made; and
  • knowledge and approval and undue influence in the testamentary context;

• statutory wills;
• mutual wills;
• ademption of testamentary gifts (where the property no longer exists or has changed in substance) and revocation of wills;
• the registration of wills;
• donationes mortis causa (death bed gifts);
• the comparative and international context of the law of wills; and
• other areas of the law of wills as set out in the Wills Act 1837.

In 2017, the Commission published a Consultation Paper requesting views on whether:

• courts should have powers to dispense with the formalities for a will where it’s clear what the deceased wanted;
•  the test for capacity to make a will should be changed to take into account the modern understanding of conditions like dementia;
• there should be statutory guidance for doctors and other professionals conducting an assessment of whether a person has the required mental capacity to make a will;
• there should be new rules protecting those making a will from being unduly influenced by another person; and
• the minimum age at which a will can be made should be lowered from 18 to 16.

In 2019, the Commission had to pause the project. By the time it restarted the project in July 2022, it was post-COVID-19 and the restrictions of the current law in a time of crisis were apparent, digital documents and electronic signatures were more commonplace, and the Commission considered perceptions in relation to predatory marriage may have changed due to the high profile cases of Joan Blass and Daphne Franks, and Labour MP Fabian Hamilton's Private Member's Bill for a change in marriage laws.

In October 2023, the Commission published a Supplementary Consultation Paper focusing on two key issues: enabling electronic wills and addressing the rule that marriage or civil partnership revokes a will.

(a) Electronic wills

The Commission defines an electronic will as a will which has been executed electronically, which presumes that it was somehow witnessed electronically as well. It is considering whether such electronic wills should be able to comply with current formalities, whether such compliance requires amendments to current legislation and whether such compliance should be automatic or at the discretion of the court. It is also considering whether an electronic will subsequently stored electronically, should be capable of being admitted to probate.

Interestingly, the Commission says,

"we continue to think that the Wills Act should be amended to exclude the possibility of electronic wills fulfilling the current formality requirements that were devised with paper documents in mind. 

We consider this is necessary to exclude the possibility of the most basic, and easily amended – and forged – types of electronic documents and electronic signatures from satisfying the formality requirements for a valid will. We consider that the wills context raises distinct considerations. That is because wills are unique. Wills are unilateral documents which can be and are regularly made without the assistance of any professionals, or any third party at all, other than the two witnesses to the testator’s signature. There is no other party to a will, and no state involvement at the time the will is made. They are not subject to any requirement of registration. They are revocable until the testator’s death, and until that time they can be kept entirely private by the testator. A will cannot be proved as valid until after the testator dies. Wills therefore operate in a way, and in a context, that is very different to contractual or transactional documents where electronic execution is increasingly commonplace."

(b) Revocation of will by marriage or civil partnership.

Under the terms of the Wills Act 1837, a will is revoked by a subsequent marriage or civil partnership. Where a will is revoked by a marriage or civil partnership, in the absence of the person making a new will, the intestacy rules will apply. Under the intestacy rules, the person’s spouse or civil partner is likely to receive the majority of their estate, if not their entire estate. Moreover, on intestacy, the spouse or civil partner will have the authority to make funeral arrangements and decide whether the person’s body should be buried or cremated, and where it should be interred.

The Commission is considering whether the rule that a will is revoked by marriage or civil partnership should be abolished.

Charity Law Association's Working Party

Rosalind Russell, an associate in Withers' TEID team, was a member of the Charity Law Association's Working Party which submitted a response to the Law Commission as part of its Supplemental Consultation. 

The Working Party recognised that a charity will only benefit under a will (rather than the intestacy rules) and therefore it is in charities' interests for any developments to simplify the will making process, whilst always ensuring that there are appropriate safeguards in place to minimise the risk of fraud or undue influence.

The Working Party noted that in Scotland, subsequent marriage or civil partnership does not automatically revoke a will and this position was maintain after the Scottish Law Commission's 2009 and the Government's 2018 reviews.

Next stage

The Commission's Supplemental Consultation period closed on 8 December 2023. The Commission is now analysing responses and aims to publish a final report with recommendations and a draft Bill in early 2025.

Digital assets

Digital assets in legacies has been a recurring topic we have explored at recent Legacy Labyrinth events, most recently our crypto workshop in 2023. We are providing a brief update on the subject again this year, given that we have a new law to talk about. However, there are also a few reminders of points to consider where your organisation is bequeathed a digital asset.

New legislative developments 

The main legal development is imminent new legislation, the Property (Digital Assets etc) Act. This follows a review of property law as it relates to digital assets by the Law Commission reported on in 2023 as supplemented in July 2024. The report recommended the introduction of legislation that effectively recognises digital assets as a 'third' category of personal property right, where the asset does not readily fall within the existing categories of rights in "things in possession" (tangible items) and "things in action" (legal rights (e.g. IP) or enforceable claims). The legislation is going into Committee in the House of Lords so is not yet officially law, however it will likely be passed in the next few months.

As a result, the new Act is extremely short and contains only the following operative provision:

"A thing (including a thing that is digital in nature) is capable of being an object of personal property rights even though it is neither— 

(a) a thing in possession, nor 

(b) a thing in action." 

A key aim of the new law is to remove any previous doubt that certain digital assets (in particular crypto tokens) are distinct things that are capable of being objects of personal property rights. At the same time, the Law Commission thought it important not to attempt to comprehensively define the types of digital assets ("things") that would be regarded as property, so there remains a great deal of scope for the law in this field to develop as new types of asset emerge. 

An example is crypto assets such as tokens which underpin or are linked to a digital asset such as bitcoin or other crypto currency. Whilst we are not seeing a large number of bequests of crypto assets at the moment, there is little doubt that with a proliferation of crypto asset owners amongst younger generations, as this crypto-owning demographic ages, we will gradually see an increase in these types of digital assets being included as part of a legacy. 

However, while the status of crypto assets as property may now be less open to doubt, legacy professionals will still need to review the digital asset they are likely to be dealing with in each case and consider the practical and legal consequences of holding that asset, as well as the charity's ability to utilise the asset for its benefit in accordance with its legal obligations. 

There are some steps to consider in this regard:

(a) Identification of the Asset

It will be important to identify the digital asset you have been given and its nature. While most crypto assets are likely to meet the definition of property within the new legal category, the Law Commission observes that there are other 'digital assets' which may not fall within the definition. For example, email accounts, electronic files or domain names. Another example would be a personal social media account which in itself (as distinct from its content – although see comments below on copyright) may not be personal property but merely a contractual right that the deceased individual account holder had with the social media platform and may not have any value to a charity beneficiary (e.g. Facebook, X, Instagram, BlueSky etc).

(b) IP and other rights 

Another practical issue to bear in mind is that whilst the individual may pass on a digital asset there may be other property rights connected with that asset or incorporated within in, which the individual does not own. An example of this is in respect of intellectual property (IP). Take the off-line example of an artwork. The physical work may be an asset in the hands of its owner and can be sold on the market or transmitted to a beneficiary as part of their estate, however if the work is still subject to copyright (for 70 years after the artist's death), exploitation of any intellectual property in the work will likely still require permission of the artist as copyright holder. In relation to digital assets, the same will apply. A digital asset which also incorporates or is linked to material protected by copyright (such as a non-fungible token or NFT which relates to a digital artwork, video or musical work) may be transferable but not necessary give its new owner such as a beneficiary charity any rights to exploit the IP connected with it and which ultimately the basis of its value. In respect of other non-proprietary digital assets, such as a cloud storage or social media account, the relevant property rights may not be in the account itself but content to which IP (specifically copyright) potentially attaches such as photographs, videos, musical recordings, literary works or other written materials.

(c) Other financial and regulatory risks 

There are other risks to consider in taking on any digital asset, particularly crypto currency assets. 

The Charity Commission is of course aware that increasing number of charities are dealing with donations of crypto assets including crypto currencies and NFTs. In its updated CC8 guidance on internal financial controls, the Commission recognises the opportunities for charities created by donations of crypto assets but reminds organisations of the legal duty to manage their resources responsibly, including by implementing appropriate financial controls and managing risk, including the risks of holding, and the limitations of using, crypto assets and having the expertise to manage these risks carefully.

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