Death and the digital age

By Alan S. Wernick

Common sense says you should have a will to protect your family and personal assets, including digital assets, when you die. An increasing number of business assets also reside in digital form, so plans must be made for what will happen to those digital assets when an owner, officer or key employee of your business dies.

Digital assets include business financial information (e.g., bank and credit card accounts), documents, email, social media websites, photographs, trade secrets and other items not meant for public disclosure such as employee medical and financial information.

If the person who managed these digital assets dies, access most likely will require at least knowledge of the user name and password and possibly possession of a working security token or encryption key. If a single person controls the business, and that person dies, his or her business, including the digital assets, may not be readily known or accessible. Those with an interest in the business’ digital assets (e.g., family members, employees, shareholders, business partners, creditors, and claimants to intellectual property rights owned or used by the business) may not even be aware of their existence and location(s). A business could fail if the appropriate people cannot get timely access to the business’s digital assets.

Some states have passed statutes providing executors of a deceased person’s assets a right to take control of certain digital assets. However, these statutes are not uniform in language and scope, and currently federal law does not adequately address these issues. 

What steps can your business take to protect itself and its digital assets?

While not exhaustive, the following is a list of proactive steps to consider taking:

  • Consult with an attorney experienced in estate planning and laws affecting digital assets.
  • Consider using a digital assets estate planning service for a technological solution to handling digital assets, but consult with a knowledgeable attorney first. The terms of use of such services may not be uniform and may open your company to legal risks. Be aware that the the terms of use governing websites containing your business’s digital assets may stymy your control over those assets. For instance, the heirs of a key employee may not be able to access that employee’s social media presence. If heirs want the decedent’s social media presence to be promptly removed, they will have to work through the terms and conditions of the social media website provider. Or, let’s say your company’s website developer registered your business’s domain in his or her own name. If that person dies, it could be very difficult to get access to your business’s website, and if a renewal payment to maintain domain ownership (URL) is missed, your business’s website domain could be lost.
  • Be aware of possible copyright infringement. For example, if your company’s digital assets include a collection of e-books whose copyright rights are owned by a third party, copyright rights may be infringed if multiple copies of an e-book are created and distributed to multiple heirs or shareholders.
Like most things in life and in business, a little planning may go a long way in preserving and protecting a digital legacy.

By Alan S. Wernick, Esq., Partner, FisherBroyles, LLP.
©2013 & 2012 ALAN S. WERNICK.



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