Disposition of Digital Assets in Georgia

• Publication year: 2017
• Citation: Vol. 25 No. 1

Disposition of Digital Assets in Georgia

Clint Alain Guillebeau
University of Georgia School of Law

DISPOSITION OF DIGITAL ASSETS IN GEORGIA

Clint Alain Guillebeau^*

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TABLE OF CONTENTS

I. INTRODUCTION.............................................................................................30

II. BACKGROUND................................................................................................31

A. DIGITAL ASSETS......................................................................................31
B. HISTORY OF DISPOSITION OF DIGITAL ASSETS.................................33

III. PROBLEMS WITH RUFADAA......................................................................37

IV. CHANGES TO RUFADAA............................................................................39

V. CONCLUSION..................................................................................................40

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I. INTRODUCTION

Estate planning law tells us that following an individual's death, the disposition of that individual's tangible property, such as a car or a house, whether he died intestate or with a thorough estate plan, will pass on to his or her heirs.¹ Probate and estate issues are governed by state law and Georgia's laws are codified in the Georgia Code in Section 53 where the disposition of tangible property can be found.² What is lacking in Georgia's wills, trust, and estate laws is what happens to other forms of property such as digital assets. With the ever-increasing reliance and usage of the internet this issue needs to be addressed.³

Currently, there is no federal law with regard to the disposition of digital assets, and state law that has thus far been adopted is scarce.⁴ However, in 2015 the Uniform Law Commission (ULC) drafted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) with a twofold purpose expressed in a prefatory note.⁵

First, it gives fiduciaries the legal authority to manage digital assets and electronic communications in the same way they manage tangible assets and financial accounts, to the extent possible. Second, it gives custodians⁶ of digital assets and electronic communications legal authority to deal with fiduciaries of their users, while respecting the user's reasonable expectation of privacy for personal communications.⁷

This Note will support the position that states, and Georgia in particular, should adopt a version of RUFADAA but should first strongly consider and redraft some of the language. This Note will advocate in part on the potential adoption of federal law requiring users to sign an online tool before gaining access to a website. Further, this Note proposes a reorganization of the three tier distribution system of digital assets found in the Revised Uniform Fiduciary

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Access to Digital Assets Act which would allow estate planning documents, if drafted later in time, to trump the online tools articulated designations.

Part II of this Note will provide the background needed for a thorough understanding of the problem. This section will provide the definition and examples of digital assets, provide the history of how digital assets have been handled over the years, as well as provide an understanding of current federal and state law regarding this issue. This section will also analyze how Georgia in particular has dealt with digital assets. Part III will outline important aspects of RUFADAA and analyze the benefits as well as potential consequences of a strict adoption of RUFADAA. Part IV will advocate for Georgia to adopt RUFADAA but with a few changes to better handle possible issues. Part V will be a conclusion summarizing this Note.

II. BACKGROUND

This section will discuss the background of digital assets in estate planning. First, this section will describe the various definitions of digital assets and provide examples. Next, this section will discuss the evolution of how federal law and states have dealt with these assets.

A. DIGITAL ASSETS

With the ever increasing use of electronics and digital media the term digital assets has evolved and will continue to evolve as society progresses.⁸ There are many definitions of digital assets. "A digital asset is any text or media that is formatted into a binary source and includes the right to use it; digital files that do not include this right are not considered digital assets."⁹ In 2014, Delaware enacted House Bill 345, Fiduciary Access to Digital Assets Act.¹⁰ Delaware, using the Uniform Fiduciary Access to Digital Asset Act as a baseline defined digital assets to mean,

data, text, emails, documents, audio, video, images, sounds, social media content, social networking content, codes, health care records, health insurance records, computer source codes, computer programs, software, software licenses, databases, or the like, including the usernames and passwords, created, generated,

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sent, communicated, shared, received, or stored by electronic means on a digital device.¹¹

The RUFADAA, a revised version of UFADAA, which will be discussed in greater detail below, defines digital assets as, "an electronic record in which an individual has a right or interest. The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record."¹² In more basic terms, digital assets include any information in digital form, either online or on an electronic storage device, including the information necessary to access them.¹³

Although the definition adopted by Delaware provided some examples, any information stored on a computer, including the cloud, information uploaded on websites, a personal right in digital property such as assets one may have obtained through online games such as Second Life or World of Warcraft¹⁴ and both the catalog and content of an electronic communication are all considered digital assets.¹⁵ With these definitions and examples of digital assets in mind, it is easy to see just how important they are in our lives.

With more internet users,¹⁶ the continued growth of social media,¹⁷ and the push for companies and individuals to go paperless,¹⁸ the importance of digital assets is going to continue to grow in the years to come.

While some of these assets may not have a quantifiable value such as the assets obtained in online gaming or even digital currency, the sentimental value of photos and personal videos are still very valuable.¹⁹ Besides sentimental value, these digital assets have real economic value. According to a McAfee survey, the average value of personal digital assets in 2011 is over $50,000 per

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person.²⁰ An owner of a Twitter account has been offered $50,000 for his handle,²¹ and the domain name "vacationrentals.com" was sold for $35 million in 2007.²²

It is interesting to note that digital assets do not include the songs on your Itunes library, e-books, or movies you have on your computer. When an individual purchases these items they buy the licenses and not the particular music, book, or movie.²³ Nonetheless, this does not diminish the importance of digital assets in an increasing digital world.²⁴

The importance and predominant nature of all of these assets in our lives as well as the value, whether sentimental or economical, shows us we need to start paying more attention to the disposition of these assets when an individual passes away. So what happens to these assets?

B. HISTORY OF DISPOSITION OF DIGITAL ASSETS

Imagine if a client of an estate planning lawyer passed away unexpectedly at an early age. The lawyer, as he always does, would compile account statements so he would know what information to gather for the family and the estate. Imagine further this client received all of his financial account statements electronically by e-mail and never printed them out. With the lawyer not allowed access to his clients e-mail and thus the information, including his tax returns, there would be great difficulty in administering the estate.

What happens if there is no estate plan? Who can have access to this information or the digital assets of the deceased? Did the person who passed away want the fiduciaries to have access to this information or these communications that are on e-mails? To understand the answer to these questions it is best to give an overview of the history of disposition of digital assets.

Before 2015 there were only eight states that had laws regarding the disposition of digital assets, but these statutes were largely inefficient.²⁵

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Connecticut's and Rhode Island's statutes,²⁶ which give access to the contents of a person's e-mail to a personal representative, are under-inclusive as they do not outline the scope of digital property.²⁷ Idaho, Indiana, Louisiana, Nevada, Oklahoma, and Virginia all have similar problems with narrow scope and under-inclusive coverage pertaining only to personal representatives or an insufficient definition of digital assets.²⁸ For the states that have no law pertaining to the disposition of digital assets the users are left with terms of service (TOS) agreements that often prohibit access to anyone but the original account owner—even after death.²⁹ When an individual agrees to these TOS agreements, often without thinking twice and simply clicking "accept," they could be signing away much more than they realize.³⁰ Yahoo's TOS provides, "You agree that your Yahoo account is non-transferable and any rights to your Yahoo ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted."³¹ Right away, one could see, from the example given above where the lawyer could not access financial information which was critical for the administration of an estate, how Yahoo's terms of service agreement could cause problems.

Besides the TOS agreements, there are also two federal laws that govern digital assets, the Stored...