Dying intestate is, of course, a fate worse than death. Yet, most individuals who have up-to-date wills and regularly attend estate-planning seminars have given little or no thought to another aspect of shuffling off this mortal coil—digital death and the disposition of digital assets. And, this being a new area of the law, many advisors have their heads in the sand and are unaware of the cloud when it comes to the disposition of digital assets, not to mention how to deal with those assets in durable powers of attorney.

You know what a digital asset is when you see it and even when you can’t see it: anything that’s owned in a digital file—for example, email accounts, Web pages, domain names, blogs and social media accounts. I’ll get to social media accounts—the prime topic of Kristina Sherry’s law review article—in two paragraphs. 

Devices housing email accounts, such as smartphones, computers, notebooks and tablets, are also digital assets. Those housing devices pass under one’s will, living trust or the laws of intestacy. But, where has the decedent hidden the keys—his user names and passwords—to unlock the contents? 

Social media accounts are just the tip of the iBerg. For an excellent recent article on digital assets other than social media accounts, I recommend “Web of Estate Planning Consideration for Digital Assets,” by Karin Prangley, Rochelle L. Haller and Anne W. Coventry, in Estate Planning, May 2013, Vol. 40/No 5.

 

Law in Flux

What happens to the stuff a decedent has on Facebook, Twitter, LinkedIn, Flickr and YouTube? These social media assets can have value beyond sharing photos of pets and airing pet peeves. The author points out, for example, the possible tangible business value of passing a LinkedIn account on to family members or business colleagues.

The law on bequeathing social media and all digital assets is in states of flux and confusion. Why the uncertainty? Opposing forces are at work and in play: privacy concerns, property law, probate law, intestacy law, conflicts of laws—and little, but developing, state statutory law. A uniform law, which states can adopt, adapt or ignore, is in the works. Enactment, however, will grind slowly.

 

Contract Law

Contract law is often the elephant in the digisphere that determines the fate and disposition of social media accounts. The terms of service (ToS) agreement inevitably governs.

When I rent a car, I’m in a hurry. On reaching the rental counter, impatient people are behind me. I dutifully place my initials where directed by the rental agent. I’m not always sure whether I should return the car with an empty or full tank. Occasionally, I have had to pay a refueling charge of $17.50 a gallon for regular gasoline. I’m even worse when using my desktop, laptop, notebook, tablet or smartphone. I speedily scroll through the ToS—without reading—and agree to everything. If I want the service, I know that they’re making me an offer that I can’t refuse or negotiate.

According to Sherry, the most common scenario in initiating a social media account is that a potential user views several screens of legalese and then registers by clicking a box and agreeing to the stated terms. Those online contracts are often called “clickwrap” and are typically upheld, says she, by courts despite their nature as contracts of adhesion. 

A contract of adhesion is appropriately named. It’s an agreement that sticks it to one of the parties—take it or leave it. These contracts are enforceable, even though, according to Sherry, only about two in every 1,000 people even skim the agreement. Courts find those contracts unenforceable only if they’re unconscionable—a rare finding.

 

Property Law

Given the personal, sentimental and, in some cases, tangible value linked to decedents’ social media usage, one might argue, according to Sherry, that those assets should be regarded as property and distributed as part of the decedents’ estates. But online services, such as Twitter and Facebook, on the other hand, might point to their contractual terms, which often declare ownership of accounts or, even more drastically, provide for their termination on death. The theory being—and the ToS providing—that digital assets, like their users, should someday die. Here the opposing forces are property/probate law versus contract law (ToS). And OMG, ToS trumps.

 

Sherry’s Key Points

Sherry gives a short history of digital death and surveys the underlying principles of contract, probate and property law. Privacy concerns are also an issue. You’ll learn about the few state legislative responses to digital death, granting executors and administrators power over decedents’ social networking accounts and other cyber-things. 

Show me the money. You’ll also learn about the burgeoning market response known as “digital estate planning services”—preparing for digital death by putting digital affairs in order.

How to bring about certainty. Sherry describes “one of the most promising proposed solutions, and one which rests somewhere between the two power extremes of state probate codes and social-media contracts (ToS).” Social media services would prompt users to check a box indicating their postmortem instructions for disposition of social media assets. This would, she maintains, effectively ascertain decedents’ wishes for the endless array of social media services available in cyberspace.

The author concludes, however, that absent immediate legal challenges, it may be unrealistic to expect social media services to self-impose these ToS options. Thus, state or federal legislation may be necessary to spur those services into making user-led disposition procedures standard practice.

In Dickensonian terms, if the law isn’t to be a tuckus, state and federal statutes should be enacted that would: (1) safeguard privacy; (2) minimize litigation and probate proceedings; (3) preserve assets when appropriate and desired; and, in Sherry’s words, (4) honor the digital outcomes that social media users would like to have happen when they die.

Johnny Carson famously said, “For three days after death, hair and fingernails continue to grow, but phone calls taper off.” Wonder what he would have said about emails and tweets.