As we age, memories of family and friends become all the more treasured. Indeed, for many of us, our most valued possessions are those things which “captured” such memories – home videos of our children’s first steps, photo albums of family members, and so on.
Traditionally, making estate planning provisions for these items was relatively simple – memories were all “captured” in tangible “containers,” i.e., recording media, such as photograph paper, VHS tapes, CD’s and DVD’s.
More recently however, digitization has changed the way memories are stored. Gone are the days of physical “containers.” Photographs, videos and other media are now almost exclusively stored in digital format: whether on a physical device such as a laptop computer or “in the cloud” on platforms such as Gmail, Facebook, DropBox and iCloud.
This continuing digital revolution has changed the way we store intangible, electronic assets – or “digital intellectual property.” Ownership of a “container” is different than ownership of the underlying rights in the content stored in such a “container”: an important distinction to keep in mind when estate planning.
First, select an executor. This person will carry out the will’s instructions and is a critical part of any estate planning. Often, executors are tasked with collecting, liquidating and distributing the assets of an estate to various named beneficiaries. Unfortunately, many executors are ill-prepared for the various challenges associated with the collection and distribution of digital assets.
Accordingly, estate planners may wish to consider appointing an additional, “digital executor” – a person who is technologically savvy and can help the primary executor with the various computer-related functions of managing digital intellectual property. This could be an independent professional (Henderson Franklin offers such service) or a computer-literate family member who can help secure and distribute digital IP in accordance with the terms of the will (e.g., ensuring that all the testator’s family and friends receive access to digital photographs, videos, etc.).
There are three primary guiding principles which estate planners should follow, namely:
- maintaining physical access to hardware;
- maintaining electronic access to hardware and digital access to software; and
- proactively establishing a legal right for loved ones to access digital content.
Physical Access to Hardware
Personal computers, mobile telephones, tablets, and other electronic devices are considered personal property in the same way as any other physical, non-real estate assets. Consider these assets by asking:
- Who should inherit your computer or cell phone?
- Where are such devices located?
- Do you have some devices at work and other devices at home?
To address these questions, digital estate planning should begin with:
- making an inventory of a testator’s electronic devices and where such devices are located; and
- designating who will inherit such electronic devices
Electronic Access to Hardware and Digital Access to Software
Gaining physical access to electronic devices is often only half the battle. Once a digital executor gains physical access to a device such as a computer, the next step is to gain electronic access to such device. Most electronic devices today are protected by some form of encryption – meaning that a password, passcode, pin number, etc. needs to be entered in order to electronically gain access to the device.
More recently, biometric authentication has complicated these issues. For example, many phones now make use of fingerprint scans and facial recognition technology (e.g., Apple’s® Face ID system) to unlock electronic devices.
In addition to making an inventory of electronic devices and where such devices are located, digital estate planning should include making an inventory of a testator’s various passwords – both for physical devices as well as various software and software-as-service applications. Digital estate planning should also take stock of how to navigate biometric authentication to prevent permanent lockouts in the event of a loved one’s death.
Right to Access Digital Content
As noted above, large amounts of personal digital content is stored “in the cloud,” i.e., by various third party software companies. In general, many software companies are structured such that (a) digital content uploaded into the software system is owned by the software user; while (b) the software company is given a license to use such digital content.
For example, Facebook’s terms of service generally provides that Facebook’s users own the intellectual property rights in the text, photographs, videos and other content uploaded to Facebook. Facebook, in turn, is given a license to use such intellectual property rights (e.g., to use the digital content to better target advertisements). Conversely, software companies retain ownership of the various intellectual property rights associated with the company and its software – while providing a license to users.
In part 2, we will take a closer look at how one of the world’s biggest software companies, Apple, handles this very issue in its terms of service for iCloud software in a follow-up post.
While estate planning has traditionally focused on financial assets (such as cash, stocks and bonds) and tangible assets (such as real estate and personal property), the disposition of digital intellectual property is a subject which should be considered by everyone during end-of-life planning.
Those needing assistance in this regard may contact Luca Hickman at email@example.com or by phone at 239-344-1307.