This series is co-written by attorney, Steven Andrew Jackson, Esq. and Mari Peterson, former law firm administrator. This is a 5 part series. Click here to read Part 1.
Last week we began our series with an introduction of the issues: what are digital assets, digital heirs, legacy heirs. We also discussed how our technology driven, in the cloud, digital world has finally caught up to death. It has revealed some problems in estate planning as people attempt to sort out estates. This article addresses that issue further from the perspective of an estate planning attorney:
THE ESTATE PLANNING LAWYER PERSPECTIVE
WHAT You Plan is HOW You Administer
The Consequences of Confusion
As a technologist and former law firm administrator I was curious about this new intersection of death and technology. To get the legal perspective, I sat down with Asheville estate planning lawyer, Steven Andrew Jackson to ask him about these recent developments and their impact on estate administration.
According to Mr. Jackson, what you plan is how you administer. If you don’t plan (and have a Will or Trust), you are still affected because the laws of each state will take over. Lack of planning, confusion and/or lack of clarity reveals gaps in the law leading to the following consequences:
- It creates inconsistent application of the law because each court in each county may handle the same issue differently.
- It makes administering the estate more burdensome for both the attorney and executor and therefore more costly which results in diminished inheritance to the heirs.
- It can lengthen the time it takes to complete administration.
- It opens the estate to potential litigation.
Mr. Jackson further clarifies: the main factor being impacted by technology is this:
In any legal proceeding (whether civil, criminal, estate, etc.), the authority of the court rests with its ability to enforce its judgments or rulings.
If someone opposes or does not comply with those judgments or rulings, the authority of that court has the ability to issue ‘show cause’ orders to force the legal representative to appear before court and explain why it will not comply or face the fines or jail time.
Said in a different way…. A court may issue legal decrees all day long, but if there is no ability to enforce them, they are useless.
Thus, in the case of our new digital world upon death: If you cannot enforce compliance by an Internet Company who holds your assets, then you potentially are not able to completely administer the estate and it will take you longer and cost you more. If it can be done at all.
He gave an estate planning example:
Typically, after someone dies, you begin to administer the Will. This means you file with the court as the Executor of that person’s estate to administer the estate – take an inventory of assets and distribute them according to that person’s wishes designated in their will or, if there was no will, according to the laws of that state.
In the old estate planning world, this was easy. Banks have physical locations. Your real estate has a physical location. Your personal property like your jewelry, cars and other valuables have a physical location.
However, in our new technology driven digital world, the “location” of our digital assets is literally in the cloud and/or owned by an Internet Company who may or may not have physical locations or who may or may not have corporate offices in your location where they can be “served” with court orders and be forced to comply. The Internet Companies such as Google, Facebook, Dropbox, Evernote, etc. have the rights to your account first. If you did not designate someone to have access to those accounts, you will need to petition the court for access. If that Internet Company is not located or have registered offices within the US, then what?
CONFUSING CROSSROADS: Where Privacy Intersects with the Law
Two other issues are raised during the estate administration process: privacy and access, both of which you relinquished to the Internet Company when you first signed up for your online accounts. What?
That’s right. When you signed up for your online accounts you were met with a very long series of documents called ‘Provider Service Agreements and EULA’s (End User License Agreement). You probably scanned through them quickly, checked off the box agreeing to the terms and went about your business.
As attorney Isabell Mueller points out in this article, “Tips for estate planning and digital assets,” you probably didn’t really read it. If you did you would see two things:
- There is no uniformity in how the death of a user is handled
- Every provider has their own procedure
In addition, Federal privacy laws are extremely strong making it difficult for you and even governmental authorities to gain access. We’ve seen a very recent example of this where the Federal government is trying to force Apple to give up access to the iPhones of the deceased San Bernardino terrorists.
Herein lies the confusing crossroads where estate planning and administration laws meets privacy laws and where the gaps exist:
WHAT IF….
a) you cannot prove you need access to their account to administer the estate (as was the Facebook case – the family wanted the account shut down because it was causing them anguish)
b) that Internet Company does not have offices in the US or if the laws in other countries don’t provide for access? (as was the Facebook case that happened in Europe). How many Internet companies are based in other countries? Most of us don’t know or have the faintest clue about the “ownership” of our accounts – we fly by the login and legal terms, if there are any, and just join.
c) the location of your assets does not have a physical location? Your photos are on Flickr. Your videos are on YouTube.
d) the Internet Company’s laws override your local state laws? There are many Federal privacy laws that override state privacy laws. For example, how does a fiduciary address laws that prohibit unauthorized access to computers and computer data?
e) your digital assets are not considered part of the estate? In other words, what is the definition of digital assets? Are all email communications, text messages, chats, blogs, online profiles considered part of the estate?
f) what if your deceased loved one designated someone else to have access to their account by designating a legacy heir like you can do with Facebook? Should the Executor also have access?
Sometimes the law is slow to change but in this case, solutions are being proposed.
Next week: We address the solution and the role of the Uniform Law Commission.