Virtual Assets and Real Advice - Clients Need Candid Advice Regarding their Digital Assets (1 of 10)

Virtual Assets and Real Advice

Clients Need Candid Advice Regarding their Digital Assets

Marcus Seiter

(Part 1 of 10 part series)

Introduction

John Berlin was a Facebook user.  So was his son, Jesse – well, at least before he died unexpectedly in 2012 at the age of 21.[i]  In 2014 Facebook celebrated its 10 year anniversary by rolling out “Look Back” videos.  At the user’s request, Facebook creates a 62-second sharable video montage of a user’s Facebook history including some of his shared photos and most liked posts, all set to inspirational music.[ii]  It quickly became a wildly popular feature with over 720 million videos generated in only a few weeks’ time.[iii]  When John started seeing other people’s Look Back videos, he yearned to see Jesse’s.  Unfortunately, only the user, in this case a deceased person, can request and share his own Look Back video.  John made repeated efforts to work with Facebook directly, but to no avail.[iv]  John found out the hard way that Facebook – not Jesse, or his heirs – controlled the rights to Jesse’s online account and content.

Here’s where the story bucks the trend.  John Berlin wouldn’t take “no” for an answer and decided to fight fire with fire, or in this case, social media with social media.  He posted a heartfelt video of himself – like an open letter on YouTube – pleading with Mark Zuckerberg, Facebook’s founder and CEO, to let John see his son’s Look Back video.[v]  It went viral – gleaning over 550,000 views and numerous shares across social media sites within less than two days![vi]   Facebook got the message.  They created Jesse’s Look Back video and shared it with John who then shared it with the rest of the world.[vii]

While many may see this as a touching example of humanity in a sometimes faceless corporate world, a growing faction of legal scholars, estate planners, and technology reporters would strongly disagree.  To them, the above story is emblematic of the frustrations and problems that unwary people are facing in the new digital age.[viii]  Writers on the subject are framing the issue this way: As people spend more of their lives interacting with digital media, they are creating and storing a vast amount of digital assets online that have real personal and financial value.[ix]  People expect their digital assets to come with certain rights associated with other forms of property – especially the right to control the disposition of such property upon an owner’s death or incapacity.[x]  However, as the above story illustrates, when it comes to digital assets stored online, there can be a big difference between people’s expectations and reality.[xi] 

Planning for the disposition of digital assets stored online has proven tricky within the current legal landscape.[xii]  Many supporters of digital estate planning believe that the best way forward is for federal and state legislatures to enact new laws to clarify these issues and promote an owner’s right to control the disposition of these digital assets at death or incapacity.[xiii]  Whether or not such a shift would be desirable, it is unlikely to occur all at once, if at all.  In the meantime, instead of focusing solely on realigning the law in accordance with people’s expectations, proponents of digital estate planning must do more to realign people’s expectations while the law remains unclear. 

To mitigate the problems associated with digital estate planning, planners must define standards of best practices.  Best practices should be designed around the attorney’s role as competent advisor as outlined in the Model Rules of Professional Conduct.[xiv]  Planners must be educated about the importance and nature of digital assets, the limited rights that should be expected in them, and effective ways to plan for them within the scope of current law.  While planners can advocate potential changes in the law, they must be careful not to place their clients at risk in the meantime.  This means that planners must be candid in their advice to clients and cautious in using old tools that have not been proven effective in this new realm of digital assets.[xv]  Well-defined standards of best practices that are grounded in established law will empower estate planners and clients alike, while furthering the legitimacy of the digital estate planning movement.

Section I of this Article will define the term “digital assets”.  Also, the rapid growth of digital assets and their relative value will be discussed.  Section II will explore the digital estate planning dilemma.  The importance of digital estate planning will be outlined and the legal barriers, especially federal privacy laws and terms of service agreements, will be covered.  Section III will discuss developments in the law favoring digital asset planning.  Specifically the few existing state laws and the proposed uniform act will be summarized.  Section IV will outline and critique various methods being employed to plan for digital assets. Finally, Section V will set forth suggestions to develop and promote best practices for digital estate planning.

(Rest of article continued in series)