Perhaps the most challenging part of a personal representative’s job is gathering all the decedent’s documents related to property ownership, from deeds and notes to account numbers and obscure title documents. The task is even more vexing when the assets are completely intangible, and a few recent high-profile examples highlight this dilemma.
10 years ago, after an IED in Fallujah killed his son, 20-year-old Justin, Jason Ellsworth asked Yahoo! to release his son’s username and password, so his surviving family and friends could see Justin’s correspondence and also have access to certain financial information. The provider refused to comply, even though America Online and some other companies will release personal information in these situations, if they receive certain documents.
Mr. Ellsworth petitioned a Michigan probate court, which ordered Yahoo! to release the information. The company complied, but neither side seemed particularly happy with the outcome, because the company had to release information contrary to its stated policy and Mr. Ellsworth had to go to court to obtain the data.
More recently, the FBI took possession of the deceased Rizwan Farook’s iPhone, after he and several other shooters killed fourteen people in San Bernardino, California in December 2015. Apple refused to release the unlock code, and the matter was set to go to court. But at the eleventh hour, the FBI hired a hacker who, rather disturbingly, was able to crack the code without much effort.
Identifying Digital Assets
The underlying fight in these cases, and others like them, is an interesting one. Even though dead people have no privacy rights, the same cannot be said of surviving friends and loved ones. And, since the former account holder is dead, their right to learn information arguably outweighs the nonexistent privacy right. But these questions, as interesting as they may be, are outside the scope of this blog. For our purposes, it is sufficient to identify the decedent’s digital assets and categorize them.
South Carolina lawmakers are currently considering the South Carolina Uniform Fiduciary Access to Digital Assets Act. There has been little activity since the bill was introduced last year, and the Legislature may well adjourn for the summer without taking action.
Several other states either have already enacted a similar provision or are debating its merits. South Carolina’s version of the UFADAA would give executors, personal representatives, and other parties a means to “manag[e] and dispos[e] of digital assets upon death or incapacitation,” and it very simply defines digital assets as any electronic record that does not have a corresponding physical asset.
Some examples of digital assets include:
- Fin-Tech Accounts: Currently, most of these accounts, like PayPal and Apple Pay, are mainly payment systems that are linked to physical bank accounts. But it is only a matter of time before these platforms become more sophisticated.
- Frequent Flyer Miles: Particularly if the decedent travelled extensively for work or pleasure, these accounts often have a significant value.
- Correspondence: If there is a question regarding manner or time of death, text messages, e-mails, instant messages, and other correspondence is not just a matter of idle curiosity.
Nearly all of these assets are single-owner, probate assets. Since most wills and other documents do not have a repository for user names and passwords, it may be a good idea to compile such a document and keep it with your original will.
Accessing and Distributing Digital Assets
Most companies will release information about digital assets if they are given:
- Death Certificate: If there is a true emergency, an obituary notice or even something more informal, like an order of service from the funeral, may suffice.
- Appointment Paperwork: A petition may do, but an order is usually better, even if it is only an interim order.
- Proof of Identification: If the company insists on a personal appearance, which is rare, it may be willing to accept a Skype call.
Once these assets are identified and accessed, they must go through the normal security process, because a personal representative has a fiduciary duty to preserve these assets for heirs and/or creditors. It is probably best to disable them, if possible, and move any valuable content, like frequent flyer miles or money, to another account. Do not move these things to your personal account; set up one for the estate.
After the digital assets are secured, they must be included in the inventory, so they must have a monetary value. If the asset is particularly large or valuable, an independent appraisal may be necessary. But in most cases, a reasonable estimate is enough.
Dividing these assets among multiple creditors and/or heirs may not be easy. In some cases, converting the asset to cash may be an option. In other instances, a setoff may be appropriate, as long as everyone agrees. For example, one heir could receive the Delta miles while another one receives the American Airlines miles and a slightly larger share of a bank account.
Digital assets can create an entirely new series of probate law issues. For a confidential consultation with an experienced Greenville probate law attorney, contact the Anderson Law Firm. Convenient payment plans are available.