The Internet has substantially altered the way people interact and express themselves, and social networking accounts, e-mail accounts, and other digital assets have become increasingly valuable in recent years. Because the value of digital assets has only been recognized in the last decade, people often do not take them into consideration when creating an estate plan. Additionally, there is hardly any little legal authority or rules addressing how digital assets should be valued and treated in a probate context. However, an even bigger problem relates to determining ownership of digital assets like social networking pages, which are created by an individual, but maintained and hosted on computer servers of large companies. As a result, digital assets have recently created problems for probate courts.
Once dismissed as the next fad, the growth of social networking websites over the past decade has been staggering. For example, Facebook currently has 1.1 billion active users, while Twitter has more than 500 million total users. Such social networking websites and applications create new and exciting opportunities for generating value and marketing to specific audiences. Businesses are starting to realize the potential uses and value of social networking pages, and are coming up with new methods and strategies of capitalizing on this potential.
Social networking sites allow businesses to gather real-time market feedback by targeting specific groups of prospective customers. Businesses can then analyze this data to create new and more efficient marketing techniques, which translates into big money. Traditional means of advertising to a target audience can be quite expensive. For example, according to AdWeek, a television advertisement on Sunday Night Football averages $425,000 for a thirty-second spot. Advertising and marketing efforts through social networking sites can be far less expensive, and can also be more specifically tailored and targeted to a particular type of consumer. (Tyler G. Tarney, A Call for Legislation to Permit the Transfer of Digital Assets at Death, 40 Cap. U. L. Rev. 773, 801 (2012)).
To date, only a few states have enacted legislation dealing with the unique issue of what happens to digital assets after the creator/user of the digital asset passes away. Generally, upon the death of the creator/user, unless the heirs of the estate are in possession of the decedent’s log-in information, the service provider, such as Facebook, will be in exclusive control of the account and its content. Provisions in the “terms of use” agreements that correspond to digital assets like Facebook pages or Twitter accounts tend to be incredibly restrictive with regard to a user’s ownership rights, and at minimum this creates uncertainty as to the ownership interest of a user, assuming a user even has any ownership interest at all.
Many digital assets are provided to a user through a license, which is limited to the account holder and thus non-transferable. Licenses cease to exist when a user (licensee) dies, and cannot be transferred in a will or other testamentary document. However, if the license is placed in a trust, there is a chance that the license will survive the death of its creator, although this tends to turn on the specific terms of the contract/license agreement. Establishing procedures for protecting and granting access to usernames and accounts is pivotal to maintaining a private ownership interest that survives the death of the user/creator of an account. For example, Twitter requires family members of a deceased user to provide contact information, their relationship to the descendant, the username of the decedent, and a link to a published obituary or news article before it will either remove a user/creator’s account or allow offline access.
As technology has grown, the internet has opened up new avenues to create tremendous wealth in the form of digital assets. However, as amazing as this technology has become, its complexities have often resulted in individuals forfeiting digital assets and their value upon death. Although, many social networking sites implement rules and procedures intended to protect the privacy of a user/creator, these protections may not be in-line with the intentions of that user/creator. Current state laws have largely failed to provide broad and effective solutions to this ever growing problem, which is why it is important to take digital assets into consideration in estate planning. If you or someone you know would like to create or modify an estate plan that takes digital assets into account, please do not hesitate to contact the experienced estate planning attorneys at Chepenik Trushin LLP.