Digital Assets

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A digital asset is content owned by an individual that is stored in digital form ("electronic record") regardless of the ownership of the physical device upon which the digital asset is stored. The electronic record is stored on a digital device such as a desktop, laptop, tablet, peripheral storage device, mobile telephone, smartphone and any similar digital device which currently exists or may exist as technology develops or such comparable items as technology may develop. There must be a right to use the record in order to be considered an asset.

Digital assets include emails received, email accounts, digital music, digital photographs, digital videos, software licenses, social network accounts, file sharing accounts, financial accounts, domain registrations, DNS service accounts, web hosting accounts, tax preparation service accounts, online stores, affiliate programs and other online accounts.

A digital asset is intangible personal property (property that lacks physical existence) unless it is printed or transformed into a physical media i.e., a photograph. It then becomes tangible personal property (personal property that can be seen, measured, felt or touched, or is in any other way perceptible to the senses).

Unless provided by the Court or the Will of a decedent, the executor, administrator, affiant or trustee has the right to access:

  • the content of an electronic communication (a digital asset stored by an electronic-communication service or carrier or maintained by a remote-computing service) sent or received by the decedent if the electronic communication service or remote-computer service is permitted to disclose under the Electronic Communications Privacy Act, 18 U.S.C. Section 2702 (b)
  • the catalogue of electronic communications sent or received by the decedent; and
  • any other digital asset in which the decedent at death had a right or interest.

The Uniform Fiduciary Access to Digital Assets Act (UFADAA) was passed on July 16, 2014 by the Uniform Law Commission and revised in 2015. It has not been ratified by New Jersey yet (www.uniformlaws.org). The final version of UFADAA provides access to digital assets the fiduciary needs to carry out his duties, while respecting the privacy and intent of the account holder. The purpose of the UFADAA is to vest the fiduciary with the authority to access, control, or copy digital assets. The UFADAA helps fiduciaries to address issues of:

  • passwords
  • criminal laws regarding unauthorized access to computers
  • data privacy laws including the Electronic Communications Privacy Act.

As the executor, administrator, affiant or trustee of the estate who has the right to access, tfhe request needs to be accompanied by an Executor, Administrator or Trustee Short Certificate or Affidavit of Next of Kin or Surviving Spouse.

The Custodian must comply with the fiduciary's request in a record for:

  • access to the asset
  • control of the asset, and
  • a copy of the asset to the extent permitted by copyright law.

The custodian must comply with the request not later than [60] days after receipt.

In doing your estate planning you will find the same principles basically apply to digital assets as the real-world assets. The American Bar Association in an article "Estate Planning for Your Digital Assets" by Dennis Kennedy recommends use of a five-step plan:

Step 1. Inventory Your Digital Assets.

  • Hardware - desktop computers, laptops, USB flash drives, USB hard drives, backup CDS or DVDs, digital cameras, ipods or other devices
  • Software
  • File structures - main folders and where you keep personal, financial and client files and documents
  • On-line presence- list of web sites, blogs, Facebook, other social media accounts, online backup sites, online sites where you store documents, photos or other files, and listserv, other groups or sites you belong to
  • Online Accounts - Amazon, other shopping sites, credit card information, online access to bank accounts and investment accounts and e-mail accounts
  • Work information - client sites, collaboration sites, online document repositories, access to software, online tools, or online databases

Step 2. Identify Appropriate Help.

The executor/administrator/affiant or trustee may not be computer savvy. It is recommended that an appropriate lawyer, accountant and/or financial planner be used to assist with the financial affairs of the estate. You may want to designate a digital advisor in your Will or Power of Attorney. Talk to your estate planning lawyer to see if dealing with your computers and digital assets is something which he has expertise.

Step 3. Provide for Access.

Keep a list of your passwords and PIN numbers in a safe deposit box or other safe place that someone knows about or tell your lawyer where the password list is kept and let him tell your executor/administrator/affiant or trustee at the appropriate time.

Step 4. Provide Instructions.

  • Notifications - If you want people to be notified of your passing you must not only make your wishes known, but you need provide access to the tools and give instructions so it can happen.
  • Continuing or Closing Sites - if you want a site to continue you will want to give instructions as to how that might occur. If accounts are closed you might want to be sure a copy is made and kept and pictures, video and audio are saved.
  • Realizing Value - simply shutting down sites might cut off potential revenue streams from e-books or other revenue producing items. You might be able to realize income from licensing, creating a book or taking other steps to monetize content.
  • "Do Not Delete" Items - if you intend that digitized documents be passed on make sure that they are identified and not lost when a hard drive is deleted.
  • "Bequeathed" Information - you might be keeping family, business or other information that should be made available to a specific person or donated to a specific place.

Step 5. Give Appropriate Authority

Designate specific knowledgeable people and provide them with the appropriate authority to manage digital assets. It might make sense to designate co-executors or co-trustees where one is specifically tasked with the responsibility for your digital assets and affairs. You might want to look into ways your online accounts might permit you to designate others to act on your behalf or get added to your accounts.