For decades, a person’s personal property was viewed as either tangible (property you could see or touch) or intangible (nonphysical items such as good will, trademarks, or copyrights). With the rise of the digital world, there is now a new category of personal property known as “digital assets.” Because […]
As mentioned above, many digital account providers have their own set of user policies (Terms of Service Agreements and Privacy Policies) which dictate how their online and digital accounts are treated after the death or incapacity of the user. It is not uncommon for these to expire when the user dies. Here is a list of the current user policies as of January 2016 for some popular account providers:
In Summary
While it is not possible to predict the future, it is clear than more and more of our social and business interactions are being conducted digitally. The more that our lives revolve around digital assets, the more important it is that they are able to be accessed by your loved ones. Find an estate planning attorney that is well versed in digital assets, and plan accordingly. In doing so you will help make the transfer of your assets much easier, and improve the likelihood that your wishes are upheld.
If you would like to talk about how we can incorporate your digital assets into your estate plan we would be more than happy to talk to you.
At some stage in most people’s lives they will consider what will happen to their personal property after their death.
Wills and testaments are filled with references to houses, money and family heirlooms, but most have never considered what will happen to their digital property when they die.
New South Wales is shining a spotlight on the issue, becoming the first Australian jurisdiction to investigate whether new laws are needed to clear up who can access data after death.
NSW Attorney-General Mark Speakman has referred the matter to the state’s Law Reform Commission.
“Not many of us think about what happens to our digital assets once we’ve gone or once we can’t make decisions anymore,” he said.
“The last thing that bereaved families want are bureaucratic hurdles and legal uncertainty.
“The Law Reform Commission will look at whether our laws are clear and fair enough to make sure people have some certainty over what will happen to their digital assets when they die.”
Digital assets is a broad term that refers to anything from intellectual property, private emails, digital music libraries and social media accounts.
But while most Australians use the internet every day, trustees and beneficiaries can still encounter problems with accessing the data of a deceased person.
“We’re the first Australian jurisdiction to be looking at these issues,” Mr Speakman said.
“There are some states in the United States that have a uniform code at the moment and we’ll be looking at whether those provisions should be replicated in New South Wales.”
The move has been welcomed by legal experts, with calls for reform in the area becoming louder in recent years.
Nexus Law Group’s Michael Perkins is a specialist in succession planning and said the NSW Government’s decision was timely.
“With the rising tide of the internet, the online economy and digital devices, the significance of digital data to day-to-day Australians is rapidly escalating,” he said.
“For many people these things just drift off into the ether and Facebook is littered with closed accounts of people who have died that are turned into tombstones.”
Mr Perkins said Australians concerned about what will happened to their digital assets should talk through their concerns with a legal expert.
“In dealing with digital assets, we’re dealing with a global community and a global economy,” he said.
“So the best way to deal with it is to engage in the international trends and make sure NSW properly engages with this very serious and current global issue.”
The Law Reform Commission will report back to the Government with its recommendations, with the review process expected to take between 12 and 18 months.
Digital assets in wills
Click here to view original web page at Digital assets in wills
The use of digital platforms such as online banking, Paypal, gaming accounts, Bitcoin accounts, cloud accounts to store photographs, and social media accounts such as Facebook and Instagram continues to grow and is creating a new category of personal property – a ‘digital asset’ which is broadly defined as anything that you may own or have rights to that exists online or on a hard storage device.
Many of these digital assets have financial or sentimental value and people must ensure that their personal representatives know about the assets and can access them to administer their estates on their deaths.
Currently, English law does not adequately deal with what happens to these assets on the death of the account holder. The duties of the Internet Service Providers (ISPs) post death, as the custodians of the assets, are not clear. Further complicating matters is the fact that many of the content providers’ servers are based outside the UK, so there is nothing to compel the content providers to give personal representatives access to the assets and the area could become entrenched in conflicts of international succession laws.
The main basis for the content providers refusing access to digital assets is that in most cases, the underlying content of the digital asset is not owned by the individual. The view of most ISPs is that the service that the individual has purchased is merely a personal, non-transferable licence, which is specific to the deceased individual and allows them to use the content during their lifetime. A typical example: music purchased on iTunes cannot be transferred by gift or on death.
Each content providers’ terms and conditions will dictate what happens to those assets on the death of the account holder, and how much access the personal representatives will have in order to administer that asset. Most of these terms and conditions forbid the sharing of any online content, such as by way of a bequest in a will.
However, for those digital assets which are capable of being bequeathed in a will, the potential for loss to an estate if they are overlooked means that it is crucial for people to consider what will happen to them on their death, and whether their personal representatives will even have knowledge of them. Typically, individual assets are not be specified in a will, and personal representatives rely on a paper trail or their knowledge of the deceased’s assets in order to administer the estate.
Digital assets, which could have enormous value, are easier to overlook. For example, the Bitcoin, a virtual asset that can have substantial financial value, is saved in a password protected digital ‘wallet’. If the wallet, the password or the device on which the wallet is stored are lost, the asset, and its value, is lost permanently.
It is not advisable to leave passwords or information about your digital assets within a will. There are a number of services which will keep a secure record of your assets within a ‘virtual safe’, but the use of these portals is not without risk or cost.
A better alternative would be to leave a detailed log of your digital and non-digital assets to be stored alongside a will. This should be updated regularly, and will be made available to the executors on death to provide them with the information they need to administer and access these assets, or to contact the content providers where the terms and conditions prohibit a personal representative from accessing someone else’s account.
It is also advisable to regularly download any items of sentimental value such as photographs or emails. The executors will then be able to access the accounts and retrieve photographs or other sentimental items, or to report and collect in assets of financial value, before closing the accounts down, or requesting that the content provider closes them. It is also interesting to explore going forward what the scenario is when a digital intangible asset is stored on a tangible physical device, such as a hard drive.
You may recall the significant loss to one unwitting digital entrepreneur who discarded a digital storage device in clearing out his room in Newport, South Wales. The device contained some of the first bitcoins ever developed and in the sharp rise of this new currency the mishap ultimately caused the poor chap to throw away £4.5m into a land fill site!
Clearly as this area grows, the definition of ‘asset’ will need expanding to reflect an ever digitalised population and the increasing value which these assets hold; content providers will need to address the issue of how these assets can be accessed by the personal representatives and any value preserved for the estate.
For more information or guidance, please contact:
Celia Speller
Solicitor
T. 020 7227 6719
E. celia.speller@rlb-law.com
Disclaimer
This briefing is for guidance purposes only. RadcliffesLeBrasseur accept no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommend that appropriate legal advice be taken having regard to a client’s own particular circumstances.
Click here to view original web page at How internet companies delete your right to own your digital purchases
When you purchase a book from a bookstore your rights to that particular stack of paper are pretty intuitive. It becomes your personal property, not much different from a t-shirt, a diamond ring, or anything else you might carry around. You can sell your book, lend it to a friend, or toss it in the fireplace. In short, unless you’re making a copy, you can do whatever you want without asking for permission from the book’s creator.
Those intuitions about ownership fall apart when we talk about our digital things. Some of the differences are obvious: You can’t line up your ebooks on a shelf, scribble notes in the margins, or lose them under your bed. But if you are like most consumers you are probably unaware of the more subtle ways that your digital books—and movies, games, and other media purchases—are different from physical copies. That’s because your rights to those digital things are filtered through a maze of intellectual property law and limited by the fine print that you agree to when you buy them.
To measure the gap between what consumers believe and what rights they actually get, two legal scholars, Aaron Perzanowski and Chris Jay Hoofnagle, created a fake ecommerce site called “Media Shop”. The authors studied the behavior of hundreds of online shoppers and published their findings in a paper called “What We Buy When We Buy Now”(pdf). Before I tell you what they learned, I’ll give you a chance to test your knowledge by answering similar questions to ones they posed.
Consider the following screenshot, which offers an ebook of The Martian, and then answer the questions below.
When you purchase an ebook you must agree to the Terms of Service (TOS) that tell you what you can do with it. TOS are essentially very one-sided contracts written by the company selling the digital goods. Often they include provisions that shield the business from liability and even prevent the consumer from going to court if they feel ripped off. Typically a consumer’s only choice is to accept them as they are, or to decline to use the service entirely. An overwhelming majority of internet users agree to them without reading them. In one experiment 98% of users failed to notice a clause requiring them to give up their first-born as payment.
Using contracts to make an end-run around property law predates the web. When the first wave of digital goods—software—began to appear in the 1970’s, businesses devised standardized End-User License Agreements (EULAs) as a legal hack to prevent users from copying their products. Unlike other kinds of property, software could be copied instantly with almost no effort. Rather than wait around for courts to figure out how to protect their business model, companies stopped selling software altogether and instead began to license it. Licensing contracts provided software businesses with a tool to control what the buyer did with their software, without the overhead of negotiating terms with each customer.
In one experiment 98% of users failed to notice a clause requiring them to give up their first-born as payment.
Since then the world of digital goods has exploded. We now routinely license books, movies, music, and games in addition to software. Decades have passed since the first software licenses were stuck onto floppy disks, but the actual law remains largely the same. Licensing agreements have been supplemented by far more pervasive TOS contracts, which extend similar protections to websites and other services. Consumer protections have, if anything, gotten weaker. People who were once owners have been transformed into mere users.
At the same time, software itself has penetrated every part of our lives. It has become an essential component of many things we are used to thinking of as physical objects. As Perzanowski and co-author Jason Schultz put it in their forthcoming book, The End of Ownership, “Your car is a computer with wheels; a plane is a computer with wings; your watch, your child’s toys, even your pacemaker are all computers at their core.” You may own your car but the software required to drive it is more like a song you listen to while driving, it’s only licensed to you.
As the things we buy—and create—are increasingly digital, the question of what we actually own is bubbling up in unexpected places.
Owners of John Deere tractors discovered that they can’t legally fix their own equipment, because according to the company, the buyer only acquires “an implied license for the life of the vehicle to operate the vehicle.” Those terms prevent third-party mechanics from using diagnostic software to determine why the tractor is broken, effectively making it impossible to repair. As a result, no matter how capable a farmer’s local mechanic might be, he has no choice but to take his tractor to John Deere’s own, often much more expensive, certified mechanics.
Contracts designed to protect software often also grant the company the right to do things that seem to invite abuse. For example, in 2009 Amazon remotely deleted copies of George Orwell’s 1984 from customers’ Kindle readers. If doing this had required them to physically enter each customer’s house, it would have clearly been a crime, but under the Kindle Store terms of service their action was entirely legal. In similar fashion, video game companies have knowingly broken certain games.
Contracts govern an ever larger slice of our lives—from how we read to how much privacy we get when we’re having sex.
For a more provocative example, consider the case of WeVibe, the vibrator made for long-distance couples and meant to be triggered remotely. Earlier this year, at the Def Con hacker conference, presenters demonstrated that the device was streaming data about its usage back to the manufacturer. The TOS for the device make this data collection legal, but it’s unlikely any of its users would approve of the company spying on their intimate moments. If buyers of the device owned the software, they could perhaps modify it to prevent this tracking, but, of course, they didn’t and the contract forbids tampering with it. (The company’s suggestion was to put the device in airplane mode—hardly a satisfying fix for a device that’s entire purpose is to be controlled remotely.)
These new contracts govern an ever larger slice of our lives—from how we read to how much privacy we get when we’re having sex. By proxy, the companies creating these products are deciding what we are and are not allowed to do. Nancy Kim, a law professor at California Western, refers to internet giants such as Google and Facebook as “quasi-governmental actors” for their ability to regulate every aspect of our lives, up to and including our freedom to speak. (Facebook is, after all, not a public space.) She describes terms of service contracts as a form of “private legislation,” which “reorder or delete rights otherwise available to consumers.”
Despite tremendous erosion of property rights, most consumers transitioning to digital media have so far avoided the pain of losing anything they really cared about. Few have had a favorite ebook deleted or been embroiled in a legal argument over their digital inheritance.
The attitudes of young adults make ownership seem positively passé. Rates of homeownership are down, the “sharing economy” is up, and everything that can be streamed will be streamed. Perzanowski, an admitted pessimist, believes it is “…a real possibility that we are in the midst of a much deeper cultural shift away from ownership.”
However, it may also be that most people simply haven’t yet realized that they’ve given anything up. Such confusion is at least in part explainable by businesses continued use of words that imply ownership, such as “buy.” When Perzanowski and Hoofnagle’s tested a version of the Media Shop that replaced the “Buy now” button with a “License now” button study participants more accurately understood their rights. Additionally, about half of all shoppers were willing to pay more to acquire a digital copy that explicitly came with traditional ownership rights, such as the right to resell.
“It is a real possibility that we are in the midst of a much deeper cultural shift away from ownership.” — Aaron Perzanowski
Scholars such as Perzanowski argue that the ideal solution is a restoration of property rights for digital goods. However, any legal fix would present significant technical, economic, and political challenges. A huge part of the global economy is now based on licensing intangible things. Unwinding that could take decades. The lobbying efforts against it would undoubtedly be overwhelming.
Courts could make a more immediate impact by simply refusing to enforce the worst parts of these contracts. The legal “doctrine of unconscionability” allows judges to throw out parts of a contract that are entirely one-sided. Unfortunately, courts have so far chosen to treat terms of service agreements the same way they treat traditional, negotiated contracts. Under that rubric, the bar to find something “unconscionable” is incredibly high, especially in cases where no money changed hands.
If consumers could be motivated to care, then the most plausible mechanism for reform may be a sort of 21st century consumer rights movement. In the last century public outcry led to regulatory reforms providing greater protection from manipulative financial terms, unsafe manufacturing processes, and other abuses. A modern equivalent could watchdog the worst abuses of software contracts and work to restore important legal protections, such as the right to modify the software in our devices so they can be repaired or repurposed.
Before anything like that can happen millions of users will have to, at a bare minimum, acknowledge that huge swaths of their lives are legally controlled by contracts they have never even read.