In my previous digital estate planning post, I posed the question regarding the difference between the decedent in the 1990’s who threw away all his bank accounts, photos, and family letters before death, and the decedent in today’s age who has stored all of this information online and fails to provide the password.
Before answering this question, estate planning is composed of two major classes of decisions: (1) heirs of the estate and (2) fiduciary appointments. Fiduciary appointments typically consist of naming individuals to act in various roles on a client’s behalf upon death or incapacity, such as personal representative/executor, trustee, power of attorney, guardian/conservator, etc. Simply defined, a fiduciary is one who is charged with making decisions on a person’s behalf, either in accordance with specific instructions or based on the best interests of the person represented by the fiduciary.
Keeping this fiduciary concept in mind, we can now jump back to our original question. The simple answer lies in who possessed the information. When information was in a paper format, the decedent was the one who possessed it. However, when information is stored in a digital format in a place other than the decedent’s personal computer, that information is no longer possessed by the decedent. Instead, the information is now possessed by an online service, and is stored in their servers.
In essence, the online service is acting as a “fiduciary” for the creator of the information. This concept was first recognized by Professor Jack Balkin, of Yale Law School. Digital estate planning boils down to an analysis of the restrictions on how the information fiduciary can use and manage the information. Of particular concern is what happens to a decedent’s information at the time of their death. Therefore, the biggest concern right now in the digital estate planning world is the loss of the right to dictate how, and to whom, a decedent’s digital assets will be distributed. In an effort to reduce liability, it appears that many information fiduciaries have, through their terms of service and privacy policy, taken steps to restrict access to a decedent’s information to any third party. This indicates that, while online services are, by the legal definition set forth above, acting as fiduciaries, they have attempted to limit the ability of the owner of the information, or a third party, to classify them as such.
Thus, there are two issues central to digital estate planning. First, a decedent may now have fiduciaries which are named outside of their estate planning documents. Second, a decedent’s estate planning documents may not effectively dispose of their digital assets, due to a conflict with the terms of service of the information fiduciary.
Now that we have effectively framed this issue, future installments will examine how these legal issues can be resolved, and whether an outside non-lawyer service is an effective mediator of such issues.
In my previous digital estate planning post, I posed the question regarding the difference between the decedent in the 1990’s who threw away all his bank accounts, photos, and family letters before death, and the decedent in today’s age who has stored all of this information online and fails to provide the password.
Before answering this question, estate planning is composed of two major classes of decisions: (1) heirs of the estate and (2) fiduciary appointments. Fiduciary appointments typically consist of naming individuals to act in various roles on a client’s behalf upon death or incapacity, such as personal representative/executor, trustee, power of attorney, guardian/conservator, etc. Simply defined, a fiduciary is one who is charged with making decisions on a person’s behalf, either in accordance with specific instructions or based on the best interests of the person represented by the fiduciary.
Keeping this fiduciary concept in mind, we can now jump back to our original question. The simple answer lies in who possessed the information. When information was in a paper format, the decedent was the one who possessed it. However, when information is stored in a digital format in a place other than the decedent’s personal computer, that information is no longer possessed by the decedent. Instead, the information is now possessed by an online service, and is stored in their servers.
In essence, the online service is acting as a “fiduciary” for the creator of the information. This concept was first recognized by Professor Jack Balkin, of Yale Law School. Digital estate planning boils down to an analysis of the restrictions on how the information fiduciary can use and manage the information. Of particular concern is what happens to a decedent’s information at the time of their death. Therefore, the biggest concern right now in the digital estate planning world is the loss of the right to dictate how, and to whom, a decedent’s digital assets will be distributed. In an effort to reduce liability, it appears that many information fiduciaries have, through their terms of service and privacy policy, taken steps to restrict access to a decedent’s information to any third party. This indicates that, while online services are, by the legal definition set forth above, acting as fiduciaries, they have attempted to limit the ability of the owner of the information, or a third party, to classify them as such.
Thus, there are two issues central to digital estate planning. First, a decedent may now have fiduciaries which are named outside of their estate planning documents. Second, a decedent’s estate planning documents may not effectively dispose of their digital assets, due to a conflict with the terms of service of the information fiduciary.
Now that we have effectively framed this issue, future installments will examine how these legal issues can be resolved, and whether an outside non-lawyer service is an effective mediator of such issues.
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