Digital life after death

Only a decade ago, the concept of completing estate-planning documents that made provision for a digital estate would have seemed absurd. Provisions of this type are now essential, because so much of our life, both professional and personal, has found its way into the digital sphere. An important question for all estate-planning and estate-administration practitioners to consider, and discuss with their clients, is what will happen to their digital estate on incapacity and death.

The elements within a digital estate do not fit neatly within the traditional concepts of estate planning, succession law or analysis of property. This is because the elements within the digital estate may involve novel concepts across multiple jurisdictions, and be subject to differing laws that regulate the ownership of, and access to, those elements.

Although there is a large amount of discussion internationally on this topic, with the exception of some states in the US, there has been no formal legislative recognition of digital estates in estate planning or estate administration. The US is leading the field in the area of formal legislative recognition with:

• the Uniform Law Commission (ULC) Uniform Fiduciary Access to Digital Assets Act; and
• Delaware adopting the ULC’s Act and signing into law the Fiduciary Access to Digital Assets and Digital Accounts Act.

Defining the digital estate

After developing their own set of definitions in 2013, the authors have now adopted three definitions from the Delaware Act, with a small variation. There are three key definitions in the Act:

• ‘“digital asset” means data, text, emails, documents, audio, video, images, sounds, social media content, social networking content, codes, health care records, health insurance records, computer source codes, computer programs, software, software licences, databases, or the like, including the usernames and passwords, created, generated, sent, communicated, shared, received, or stored by electronic means on a digital device’;
• ‘“digital device” means an electronic device that can create, generate, send, share, communicate, receive, store, display, or process information, and such electronic devices shall include, but are not limited to, desktops, laptops, tablets, peripherals, servers, mobile telephones, smartphones, and any similar storage device which currently exists or may exist as technology develops or such comparable items as technology develops’;
• ‘“digital account” means an electronic system for creating, generating, sending, sharing, communicating, receiving, storing, displaying, or processing information which provides access to a digital asset which currently exists or may exist as technology develops or such comparable items as technology develops, stored on any type of digital device, regardless of the ownership of the digital device upon which the digital asset is stored, including, but not in any way limited to, email accounts, social network accounts, social media accounts, file sharing accounts, health insurance accounts, health care accounts, financial management accounts, domain registration accounts, domain name service accounts, web hosting accounts, tax preparation service accounts, online store accounts and affiliate programs thereto, and other online accounts which currently exist or may exist as technology develops or such comparable items as technology develops’.

It is important to note that there may be different types of digital assets and digital devices – for example, those your client owns versus those owned by an online service provider and licensed to your client under a terms-of-service-type agreement.

The variation mentioned above is that the authors prefer ‘digital estate’ as the umbrella term encompassing digital assets, devices and accounts. This term is similar to other succession-law terminology (for example, ‘a life estate’, ‘my residuary estate’ and ‘the balance of my estate’) and is preferred for that reason: it refers to a part of a person’s estate.

The benefit of these definitions is that they are broad enough to cover the field and, for estate-planning and administration purposes, allow provision to be made for a digital estate. When carefully drafted, they also allow the digital estate to come into the legal possession and/or control of an attorney, executor or administrator, in the absence of a law or agreement to the contrary.

Key considerations

Completing estate planning that makes provision for a digital estate involves making decisions about, and putting into effect, legal documents that give directions on: who is to manage and have control over the digital estate, and what is to happen to, or who is to receive, the digital estate, and in what form.The importance of the digital estate will differ from person to person. Some key reasons to make provision for the digital estate include that it may have financial or sentimental value; if breached, may pose a security or financial threat; and, if incorrectly managed, could result in criminal liability for those trying to access parts of the digital estate.

Many people will name a surviving spouse or adult child as attorney or executor, but they might not be the best person to deal with the digital estate, especially if they are not technologically savvy. Serious reflection should be given as to who has the right skills to manage the digital estate. Your clients may also want to name people in a specific role, or clearly identify individuals as ‘go to’ people.

Consideration should be given to whether:

• notification is to be made via social media-type accounts of incapacity or death;
• particular digital accounts are to be closed;
• digital devices are to be cleared of content;
• digital assets located on digital devices ought to be specifically provided for;
• printouts of digital accounts are to be provided to particular people; and
• the regulation of the digital account prohibits or limits the ability of an executor or attorney to deal with it.

Digital estate planning

The steps that practitioners may need to implement include:

• Defining ‘digital estate’, ‘digital assets’, ‘digital devices’ and ‘digital accounts’ in the estate-planning documents.
• Drafting a clause in the power of attorney authorising the attorney to access, use, delete, control or transfer any part of the digital estate.
• Drafting a clause in the will authorising the executor to access, use, delete, control, transfer, distribute or dispose of any part of the digital estate.
• Drafting clauses in the will that gifts the digital estate. For example: ‘Hold all family photographs, whether personal files or digital assets, and provide one copy to X at the expense of the estate. After providing the copies to X, to hold the originals as part of the chattel contents; or to gift a copy of all digital assets stored on the will-maker’s digital devices to X.’
• Drafting a memorandum of wishes for the attorney and/or executor, with instructions on the digital estate and how it is to be dealt with. For example: ‘Delete all digital assets from a digital device prior to distributing the digital device in accordance with the terms of the will.’
• Having the client complete an inventory of their digital estate, and obtaining details of where the updated version will be kept. Practitioners should not take the inventory and passwords due to the security risk. Placing a record with the will (instead of in the will) of where the inventory holding those details is stored is the best option.

Although some terms-of-service-type agreements try to restrict such actions, the inclusion of specific powers to deal with the digital estate, rather than generalised powers (or none at all), is more likely to result in an online service provider responding positively to attorney or executor requests.

Digital estate administration

Whether or not provision has been made for the digital estate, the following are important steps that may assist practitioners in the estate-administration process:

• Making an inventory of the person’s known digital estate. This may require contacting friends or family, or accessing a digital device that reveals the existence of various digital assets or digital accounts.
• If necessary, finding people who have the appropriate technical and legal knowledge to access the digital estate.
• Taking steps to manage any financial arrangements that are solely conducted through the digital estate.
• Paying any liabilities relating to digital accounts.
• If it is necessary to change passwords, changing them as soon as possible.
• Considering, in the case of death, in what form the digital devices should be given to the beneficiaries.
• Considering whether it is prudent to buy an external hard drive and copy all data, and store it in a secure place.
• Obtaining the details of contact lists, email accounts and social media accounts so appropriate people can be notified.
• Considering who owns the digital accounts, whether access is regulated and the consequences of that regulation.
• Considering who should be given access to the digital accounts and, if possible, granting them access.
• Considering what needs to be done with the digital accounts – that is, whether they should be deleted, transferred, sold, cashed-out or, if an option, memorialised.
• Taking steps to protect the privacy of the person who has lost capacity or died.
• Informing the online service provider that the account user has died.

Demand for expert advice on digital estates will only increase. Practitioner reluctance to be involved in estate planning with a digital element will cause clients to seek other advisors with appropriate expertise.

Law reform

The authors encourage STEP, in every jurisdiction, to seek law reform, based substantially on the Uniform Fiduciary Access to Digital Assets Act. Legislation is necessary to provide clear guidance for practitioners and clients, and to improve fiduciaries’ ability to manage digital estates.

Kimberley Martin and Peter Worrall on how to deal with a digital estate.

Only a decade ago, the concept of completing estate-planning documents that made provision for a digital estate would have seemed absurd. Provisions of this type are now essential, because so much of our life, both professional and personal, has found its way into the digital sphere. An important question for all estate-planning and estate-administration practitioners to consider, and discuss with their clients, is what will happen to their digital estate on incapacity and death.

The elements within a digital estate do not fit neatly within the traditional concepts of estate planning, succession law or analysis of property. This is because the elements within the digital estate may involve novel concepts across multiple jurisdictions, and be subject to differing laws that regulate the ownership of, and access to, those elements.

Although there is a large amount of discussion internationally on this topic, with the exception of some states in the US, there has been no formal legislative recognition of digital estates in estate planning or estate administration. The US is leading the field in the area of formal legislative recognition with:

• the Uniform Law Commission (ULC) Uniform Fiduciary Access to Digital Assets Act; and
• Delaware adopting the ULC’s Act and signing into law the Fiduciary Access to Digital Assets and Digital Accounts Act.
  

Defining the digital estate

After developing their own set of definitions in 2013, the authors have now adopted three definitions from the Delaware Act, with a small variation. There are three key definitions in the Act:

• ‘“digital asset” means data, text, emails, documents, audio, video, images, sounds, social media content, social networking content, codes, health care records, health insurance records, computer source codes, computer programs, software, software licences, databases, or the like, including the usernames and passwords, created, generated, sent, communicated, shared, received, or stored by electronic means on a digital device’;
• ‘“digital device” means an electronic device that can create, generate, send, share, communicate, receive, store, display, or process information, and such electronic devices shall include, but are not limited to, desktops, laptops, tablets, peripherals, servers, mobile telephones, smartphones, and any similar storage device which currently exists or may exist as technology develops or such comparable items as technology develops’;
• ‘“digital account” means an electronic system for creating, generating, sending, sharing, communicating, receiving, storing, displaying, or processing information which provides access to a digital asset which currently exists or may exist as technology develops or such comparable items as technology develops, stored on any type of digital device, regardless of the ownership of the digital device upon which the digital asset is stored, including, but not in any way limited to, email accounts, social network accounts, social media accounts, file sharing accounts, health insurance accounts, health care accounts, financial management accounts, domain registration accounts, domain name service accounts, web hosting accounts, tax preparation service accounts, online store accounts and affiliate programs thereto, and other online accounts which currently exist or may exist as technology develops or such comparable items as technology develops’.

It is important to note that there may be different types of digital assets and digital devices – for example, those your client owns versus those owned by an online service provider and licensed to your client under a terms-of-service-type agreement.

The variation mentioned above is that the authors prefer ‘digital estate’ as the umbrella term encompassing digital assets, devices and accounts. This term is similar to other succession-law terminology (for example, ‘a life estate’, ‘my residuary estate’ and ‘the balance of my estate’) and is preferred for that reason: it refers to a part of a person’s estate.

The benefit of these definitions is that they are broad enough to cover the field and, for estate-planning and administration purposes, allow provision to be made for a digital estate. When carefully drafted, they also allow the digital estate to come into the legal possession and/or control of an attorney, executor or administrator, in the absence of a law or agreement to the contrary.

Key considerations

Completing estate planning that makes provision for a digital estate involves making decisions about, and putting into effect, legal documents that give directions on: who is to manage and have control over the digital estate, and what is to happen to, or who is to receive, the digital estate, and in what form.The importance of the digital estate will differ from person to person. Some key reasons to make provision for the digital estate include that it may have financial or sentimental value; if breached, may pose a security or financial threat; and, if incorrectly managed, could result in criminal liability for those trying to access parts of the digital estate.

Many people will name a surviving spouse or adult child as attorney or executor, but they might not be the best person to deal with the digital estate, especially if they are not technologically savvy. Serious reflection should be given as to who has the right skills to manage the digital estate. Your clients may also want to name people in a specific role, or clearly identify individuals as ‘go to’ people.

Consideration should be given to whether:

• notification is to be made via social media-type accounts of incapacity or death;
• particular digital accounts are to be closed;
• digital devices are to be cleared of content;
• digital assets located on digital devices ought to be specifically provided for;
• printouts of digital accounts are to be provided to particular people; and
• the regulation of the digital account prohibits or limits the ability of an executor or attorney to deal with it.

Digital estate planning

The steps that practitioners may need to implement include:

• Defining ‘digital estate’, ‘digital assets’, ‘digital devices’ and ‘digital accounts’ in the estate-planning documents.
• Drafting a clause in the power of attorney authorising the attorney to access, use, delete, control or transfer any part of the digital estate.
• Drafting a clause in the will authorising the executor to access, use, delete, control, transfer, distribute or dispose of any part of the digital estate.
• Drafting clauses in the will that gifts the digital estate. For example: ‘Hold all family photographs, whether personal files or digital assets, and provide one copy to X at the expense of the estate. After providing the copies to X, to hold the originals as part of the chattel contents; or to gift a copy of all digital assets stored on the will-maker’s digital devices to X.’
• Drafting a memorandum of wishes for the attorney and/or executor, with instructions on the digital estate and how it is to be dealt with. For example: ‘Delete all digital assets from a digital device prior to distributing the digital device in accordance with the terms of the will.’
• Having the client complete an inventory of their digital estate, and obtaining details of where the updated version will be kept. Practitioners should not take the inventory and passwords due to the security risk. Placing a record with the will (instead of in the will) of where the inventory holding those details is stored is the best option.

Although some terms-of-service-type agreements try to restrict such actions, the inclusion of specific powers to deal with the digital estate, rather than generalised powers (or none at all), is more likely to result in an online service provider responding positively to attorney or executor requests.

Digital estate administration

Whether or not provision has been made for the digital estate, the following are important steps that may assist practitioners in the estate-administration process:

• Making an inventory of the person’s known digital estate. This may require contacting friends or family, or accessing a digital device that reveals the existence of various digital assets or digital accounts.
• If necessary, finding people who have the appropriate technical and legal knowledge to access the digital estate.
• Taking steps to manage any financial arrangements that are solely conducted through the digital estate.
• Paying any liabilities relating to digital accounts.
• If it is necessary to change passwords, changing them as soon as possible.
• Considering, in the case of death, in what form the digital devices should be given to the beneficiaries.
• Considering whether it is prudent to buy an external hard drive and copy all data, and store it in a secure place.
• Obtaining the details of contact lists, email accounts and social media accounts so appropriate people can be notified.
• Considering who owns the digital accounts, whether access is regulated and the consequences of that regulation.
• Considering who should be given access to the digital accounts and, if possible, granting them access.
• Considering what needs to be done with the digital accounts – that is, whether they should be deleted, transferred, sold, cashed-out or, if an option, memorialised.
• Taking steps to protect the privacy of the person who has lost capacity or died.
• Informing the online service provider that the account user has died.

Demand for expert advice on digital estates will only increase. Practitioner reluctance to be involved in estate planning with a digital element will cause clients to seek other advisors with appropriate expertise.

Law reform

The authors encourage STEP, in every jurisdiction, to seek law reform, based substantially on the Uniform Fiduciary Access to Digital Assets Act. Legislation is necessary to provide clear guidance for practitioners and clients, and to improve fiduciaries’ ability to manage digital estates.

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