Stoll Keenon Ogden PLLC | Advertising Material
by Robby Packard and Doug Brent
Did you know you have a digital life? If you’re online, it’s true. Though it may be disconcerting to realize that more and more of our lives get less and less tangible all the time, what may be more disconcerting is that the law is not particularly well-equipped to govern it.
Consider how life has changed in just 25 years. In 1989, our mail was tangible. Our photos were tangible, and kept in albums. Our important documents were stored in a file cabinet or safe, and even our favorite music was stored on vinyl records or cassette tapes (CDs were even relatively new). Our books were actual books – bound collections of paper we could hold in our hands and pass down to our children and grandchildren.
One generation later, most of this has changed. Most people today store at least some of their mail, photos, documents, music, or books in the form of electronic data. This is inevitable because of the ways we share information. This data is stored on a computer server and accessed through the Internet.
Both the law and technology companies are in the midst of trying to figure out how this new electronic world will be governed, particularly when people die and wish to pass their assets on to their heirs. Kentucky has well-developed law on the rights of executors, trustees, and other fiduciaries with regard to the physical assets owned by a person, but Kentucky law currently says nothing whatsoever about how or even whether a fiduciary can act with regard to “digital” assets. And Kentucky is not alone – few states have any laws on the books that provide this type of guidance.
Technology companies are a bit further along, though their solution is to avoid treating any of these digital assets as assets at all. If you have bothered to read the “End User License Agreement” that you must agree to in order to use your Kindle or iTunes software, you realize how little control your heirs might have over the electronic books and other media you’ve purchased. Consider media you purchase from Apple and leave in the “Cloud.” You might “own” that favorite movie and stream it to your television from time to time. But what if you die? Does your administrator or heirs have any rights to that digital property stored on a 3rd party server?
Or consider the family photographer who takes hundreds of digital images but only stores them in an online digital locker, perhaps in connection with a photobook publishing site. In the past, precious family photographs were handled like other tangible property—easily passed on. In the digital world, access to them may require a password or more, and access to those files other than by the account holder may unintentionally tangle with computer hacking statutes.
Moreover, how does your death even get communicated to social media sites or to iTunes? Who is in charge of notifying Facebook or LinkedIn or Gmail that you’ve died? Who has authority to terminate your Kindle account? Who should have rights to retrieve a novel you wrote and saved only on Google Drive?
The law is attempting to catch up. In August, Delaware became the first state in the union to pass a version of the Uniform Fiduciary Access to Digital Assets Act, which is designed to provide clarity and authority on exactly these types of questions. This Act (“UFADAA”) is designed to provide the guidance and authority necessary for executors, administrators, guardians, conservators, attorneys-in-fact, and trustees to act with regard to digital assets just as they already do with regards to tangible property.
UFADAA brings up questions as well as answers. It raises privacy concerns – does an attorney-in-fact have the right to read all of your email? And it explicitly states that digital assets such as those acquired via iTunes, Kindle, etc. are controllable by a fiduciary only to the extent allowed by the service’s end user license agreement. In other words, it does not purport to transform an asset that currently cannot be transferred into one that can.
As people purchase more digital music, books, and movies, attorneys may get creative – perhaps by establishing trusts for clients to use to purchase digital assets, with the clients’ children being named as trust beneficiaries so as to avoid any prohibition on 3rd-party transfers. It’s not certain whether this would work, legally, but in a world where more and more wealth is in digital form, it’s something that more people may be inclined to pursue. The goal of estate planning attorneys has always been to provide their clients with control – control over their assets during their lives and a say in how they are distributed at their deaths, and as property itself transitions into altogether new forms, the law which attorneys use to provide this control will need to catch up.
Even though the law in Kentucky regarding your digital assets and the rights and duties of your fiduciaries with regards to them remains unclear, that does not mean there is nothing you can do. Language can be added to wills, trusts, powers of attorney, and other documents which, even in the absence of a clear law, demonstrates your intent with regard to these assets and grants authority which may be recognized by various technology companies. If you have questions about what you can do, consider speaking with an attorney to learn more. We find ourselves in a world now where an individual no longer takes a photo with a camera, develops it into a physical object, and places that photo in an album for safekeeping, but rather takes the photo with the same smartphone that’s used to then upload the picture almost instantaneously to Facebook or Twitter. It would be nice to know what happens to that photo when the individual is gone.