Other Digital Assets and Estate Planning

Here is part seven in my series on digital assets and estate  planning.  Interestingly, the rest of the world is picking up on this topic.  Here is a recent article from the new york times on digital assets.

There are a number of other types of digital assets that deserve consideration when planning an estate.  These can be web site accounts or actual assets in digital form.  Here is a brief general survey. 

All kinds of virtual assets

Here is part five in my series on digital assets. Today, I will touch on the general concept of why digital assets are important to an estate planner or probate attorney. Wikipedia defines "digital assets" as email, social media, and other online accounts, protected by a password and right to use a specific account. Widespread internet technology adoption has created a class of assets, virtual or digital assets, which estate representatives and their legal counsel need to address. These assets can have material value. Today's estate planners need to be able to recognize these assets and the special attention that they call for. Proper planning for virtual assets today can lead to smooth estate administration tomorrow.

There are more classes of virtual assets than one might think. The issues related to these assets are generally issues of content and access. For the most part, content is an easier issue as most content belongs to the creator and the creator's estate. Some terms of service might change that analysis. For example, Facebook was recently in the news for its claims that it had ownership over everything posted there. Access is the harder issue. Access is easy to deal with when a representative has the decedent's username and password. Be aware that even the use of a username and password by an Executor or Administrator may be a violation of certain terms of service. Things get more complex when a username and password are not available. These materials will seek to point out virtual assets that estate planners and probate practitioners need to consider and how to access them.

Beginning in the next installment, beginning with email, I will provide brief general information on how to deal with a particular account upon the death of an account holder.

Click here for part four
Click here for part six

A small side note on law and technology in Illinois

This is the fourth installment in my series on estate planning for virtual assets.

As I have already mentioned, the normally law creeps forward at a snails pace. Technology flies forward at a fast pace. In comparison to each other, technology is going light years faster than law. This disparity in development leads to some confusing, discordant, and unintended results.

One example of the result of these differences comes from an attempt made by the State of Illinois with respect to sexual predators. As of January 1, 2010, the Illinois legislature amended the Illinois Criminal Code to make it a crime for a person convicted of a sex offense to access or use social networking websites.

Here is the statute:

730 ILCS 5/5-6-3(8.9) Conditions of Probation and of Conditional Discharge.
(8.9) if convicted of a sex offense as defined in the Sex Offender Registration Act committed on or after the effective date of this amendatory Act of the 96th General Assembly, refrain from accessing or using a social networking website as defined in Section 16D-2 of the Criminal Code of 1961;

The Illinois legislature defined the term "social networking website" in the law:.

720 ILCS 5/16D-2(h) Sec. 16D-2. Definitions. As used in this Article, unless the context otherwise indicates:
(h) "Social networking website" means an Internet website containing profile web pages of the members of the website that include the names or nicknames of such members, photographs placed on the profile web pages by such members, or any other personal or personally identifying information about such members and links to other profile web pages on social networking websites of friends or associates of such members that can be accessed by other members or visitors to the website. A social networking website provides members of or visitors to such website the ability to leave messages or comments on the profile web page that are visible to all or some visitors to the profile web page and may also include a form of electronic mail for members of the social networking website.

Although you cannot discount the good intentions of the Illinois legislature and the noble goal of keeping sexual offenders off of places like facebook and myspace, the new law, unfortunately, demonstrates the inability of the law to keep up with and define the current state of "Web 2.0". The statutory definition of a "social networking" website is so overly broad that nearly any modern commercial webiste, blog, site with a message board, shopping site, or Linkedin will satisfy the definition.

There's a lot of shakeout left before the law can properly deal with web-related technology issues. Until then, we'll just need to do our best.

Click here for part three
Click here for part five

The Ellsworth Case with Yahoo!

I will continue with part three in my series on digital assets with a discussion of the Estate of Justin M. Ellsworth and his family's troubles with his Yahoo! email account.

The case easily illustrates the complexity of dealing with e-mail accounts. The 2005 Michigan probate was the estate of a marine Justin Ellsworth, who was killed in Iraq. Mr. Ellsworth's parents sought to recover the contents of their son's Yahoo! e-mail account. Yahoo refused Justin's parents' request based upon its Terms of Service (TOS) which indicate that a Yahoo! account is non-transferable and terminates at death.

Yahoo's terms of service:
No Right of Survivorship and Non-Transferability. You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.

Yahoo argued that they needed to enforce the privacy rights of their account holders. Elsewhere in the terms of service, Yahoo indicated certain instances upon which it could release private information.

Yahoo's terms of service
You acknowledge, consent and agree that Yahoo! may access, preserve and disclose your account information and Content if required to do so by law or in a good faith belief that such access preservation or disclosure is reasonably necessary to: (i) comply with legal process; (ii) enforce the TOS; (iii) respond to claims that any Content violates the rights of third parties; (iv) respond to your requests for customer service; or (v) protect the rights, property or personal safety of Yahoo!, its users and the public.

Justin's parents were able to obtain an order from the Oakland County Michigan probate court ordering Yahoo to turn over the emails in the account. Yahoo complied with the court order, although the account password itself was never provided to the estate. Instead, Yahoo produced a CD containing the emails and indicated that it would also produce paper copies to the family.

The case brings a number of important questions to light. What exactly is the actual property owned by the estate? Is it the underlying source code? Is it the writings of the account holder? What about writings other people wrote to the account holder? What about the privacy rights and copyright rights of email senders and recipients?

With respect to copyright issues, the estate certainly had copyright in the emails composed by Justin Ellsworth and possibly implied consent for use of those emails received by Justin Ellsworth. It is important to note that Yahoo never made a claim of ownership over the emails in Justin Ellsworth's account. In fact, their TOS explicitly rejects this.

Yahoo's TOS:
Yahoo! does not claim ownership of Content you submit or make available for inclusion on the Yahoo! Services

Even if an estate has a copyright in the material contained in an email, the estate may not necessarily have the right to access the information. It can be argued, and Yahoo did argue, that the contractual rights in Yahoo's TOS trump the estate's copyright. In other words, they limit the family's access to the copy of the copyrighted materials. Their argument can be simplified by saying that they are merely a holder of the email content and the right of access to the content disappears upon the death of the account holder. The Yahoo account was governed by contract law and, by accepting the terms of service, Justin agreed that his account was not transferable.

The case raises many questions and provides few answers. Nonetheless, it is clear that the law will not have ready made answers to the questions raised by technology related or virtual assets.

Click here for part two of this series
Click here for part four of this series

A new breed of assets for planners

The vast majority of probate estates are straightforward... and tangible. Or maybe it is right to say that the vast majority of probate assets are tangible assets. Until recently, obscure intangible assets were rare. Technology has transformed even the most mundane estates into a walk through the world of contract and intellectual property law. Email or the asset that constitutes email creates a whole new set of questions for attorneys to address. Before the internet, personal correspondence was a simple concept. Someone wrote on a piece of paper. Certainly, the law of intellectual property and copyright might make an appearance in a theoretical review of the laws related to a physical letter, but it is pretty clear that physical letters are tangible assets that form part of a decedent's personal estate.

E-mail is a letter in electronic form. That's simple enough or at least it may seem so. If only it were that easy. The situation is made even more complicated because of the different ways email can be processed. There are at least two types of e-mail: POP-based and Web-based. POP-based email is usually downloaded to and stored on a local computer or other device. Web-based email is remotely accessed in via a password in a remote account and stored in one or more jurisdictions by an e-mail provider. Already, the issue of ownership of e-mail has become murky. What exactly is the e-mail and who should it belong to?

There is still an unsettled debate as to the exact nature of e-mail. Again, POP-based email is seems easy enough to deal with if it is all downloaded to a central computer and that computer is gifted to the same person who is the intended recipient of the e-mail. However, what if the electronic correspondence is of value and the recipient of the computer is different from the recipient of the e-mail? What if the e-mail is stored on multiple devices such as a desktop computer, cell phone, iPad, and netbook computer? Web-based email presents even more problems. What if the web-based account provider does not provide for transfer of the email account? What if the personal representative does not have a password? In a "normal" estate, one of the first things a personal representative is counseled to do it to have the U.S. Mail of a decedent forwarded to the representative's address. What about electronic mail? What if the decedent was receiving bills via email? Will the representative be able to get to the account?

These issues only begin to scratch the surface of a complex area that is still very much developing on a day to day basis. In the next installment, I'll give an example of this complexity in practice - the case of the Estate of Justin M. Ellsworth and Yahoo! email.

click here to go to part one
click here to go to part three