Law only partially addresses post-death treatment of digital assets

Apple recently denied Peggy Bush access to her deceased husband, David's, Apple ID password so she could reload an already purchased game on their iPad. Instead, Apple requested a court order before they would provide access to the account. Common among spouses, Peggy and David had both mutually used the iPad. While Peggy knew the iPad log-in information, she didn't have the required password for the download. Thus without Apple's help, she couldn't download what she'd bought. Given the expense of a court order, Peggy eventually gave up. While this story happened in Canada, Apple has like policies that cover American-based users of their online services.

Defining rights related to digital assets can be ambiguous at times. Additionally, many people don't read the terms of service attached to online content, and these terms are frequently updated, sometimes without due notice. Yet courts will generally honor them, asking only for conspicuous notice of the terms and an unambiguous manifestation of assent to them. See Ajemian v. Yahoo, Inc., 83 Mass.App.Ct. 565 (2013). Dealing with digital assets post-death, such factors are difficult to contest as the person who assented is no longer around.

Today, digital assets are more than inexpensive games or apps. People store personal photos and maintain email correspondence. Some financial accounts are maintained exclusively online, such as Paypal or bitcoin-based ones. People run businesses on sites like eBay or Etsy. Blogs and YouTube channels can generate substantial and ongoing revenues. Some online gaming accounts have true value and even hold online assets. Content depositories host music, books and movies.

Who owns these assets and has access to them at death? This answer matters not only for ownership purposes but also for more practical ones. Sometimes the data stored on these platforms is needed for numerous reasons, whether to determine the location and value of more traditional assets or for informational purposes related to the death. Many people don't realize that numerous platforms own the means of access to content, even if the user has paid for and owns the content itself. Some content is merely leased; certain accounts terminate at death.

Laws have struggled to keep up with ever-evolving digital models. Many terms of service do not allow access to anyone, including those administering an estate, other than the account holder. Under the Stored Communications Act, custodians of such content are required to protect these assets while those accessing it unauthorized can be criminally prosecuted, even if they are administering an estate and acting in such capacity. California recently enacted Assembly Bill 691, or the Revised Uniform Fiduciary Access to Digital Assets Act, which was added to the California Probate Code at Sections 870 to 884. These changes took effect Jan. 1, 2017.

Sections 870 to 884 attempt to clarify what happens to digital assets post-death in California and is similar to like codes sections that have been adopted in numerous other states. While many of these provisions might be similar, they do vary by locale. Meanwhile, online custodians often have stated in their terms of service which jurisdictions' law governs accounts on their platform. Which jurisdiction's law applies thus might be unclear in some circumstances.

Basically, these new provisions create a three-tier priority for determining a decedent's intent with respect to disclosure of their online assets. They provide the steps required to get such access based on who is requesting it and for what purpose.

"Custodians" are defined as those companies which host or hold the online digital assets. "Online tools" is also defined and basically works like a beneficiary on an insurance policy or retirement account. Online tools are given preference over even later-drafted testamentary instruments. Facebook, for example, has such a tool. If the online tool hasn't been chosen, then a will or other testamentary instrument that provides for treatment of these assets controls. If neither exists, the custodian's terms of service applies. Most estate planning documents don't have provisions which specifically identify and apply to digital assets, especially those drafted years ago. Thus, not only do most people not maintain a current list of their digital assets and related passwords, they have left control and disposition of them subject to various custodian's terms.

Under AB 691, different procedures are mandated for disclosure of digital assets based on the type of asset involved and the type of requesting party. Under the act, a "fiduciary" is defined as a "personal representative or trustee" and can be designated in a will or trust to receive disclosure of digital assets. For this fiduciary to gain access they must show evidence that they were so authorized and custodians can often require a court order. If digital assets are held in a trust, a court order will not be required.

Custodians also have certain discretion over what digital assets they must provide. While one code section requires certain disclosure within 60 days, so many protections are also built in so that essentially the custodian ultimately can decide. They can provide all, some or none of the digital assets, especially if the assets can't be reasonably segregated or if doing so would be burdensome. A catalogue, or basically meta data, which shows a record of communications but not the content of these communications, is often all that a custodian must provide. Passwords and deleted content do not need to be disclosed. Custodians can also request information to identify the account and can require various inputs, including that the disclosure is necessary for the administration of the estate or that it is linked to a trust. Custodians can bill a "reasonable administrative charge" for the costs related to disclosure.

While Sections 870 to 884 do provide more clarity than existed prior to their enactment, many definitions are vague or open to numerous interpretations. "Record," for example, is defined broadly and yet is a core defined term that encompasses the assets. Furthermore, the priority given to online tools is troubling. Thankfully, online tools must be distinct from the terms of service and allow for revisions. More troubling, as happens frequently with IRAs and insurance policies, many people will forget to update them as circumstances change, especially given how many online accounts most people have today. Additionally, people so electing might also not realize that online tools dominate over wills and other testamentary instruments. The control custodians have over what they choose to provide, even with a court order, is a disturbing reality, and the cost required to get access to digital assets will be prohibitive for many. Effectively, only limited access to digital assets still exists post-death.

To be fair to the custodians, most people don't store nearly the amount of personal information in hard copy as they have digitally, and it is reasonable to expect that password protected content is just that - protected from those with whom we choose not to share it. Death should not open up what someone kept private. A recent NetChoice poll showed that over 70 percent of Americans want their online communications and photos to be private after they die. Basically, custodians aren't necessarily equipped to decide what content to share, especially when their user, with whom they had the actual contract, is dead.

From an estate planning purpose, those with digital assets, especially valuable ones, should take pro-active steps with respect to their access and eventual disposition. California Probate Code Sections 870 to 884 have now provided a baseline framework upon which effective testamentary provisions controlling digital assets can be drafted. Most Custodians will likely also draft online tools, similar to how they all have terms of service, and those default provisions are likely going to be suited to their interests and not those of the asset holders. A default agreement is rarely in a client's best interest.