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Recent digital assets case highlights confusion over online ownership after death

Tuesday, 19 February, 2019

Confusion regarding laws in the US around the administration and distribution of a deceased’s digital assets have been highlighted in a recent case, In re Scandalios (2017-2976/A N.Y. Surr. Ct. 2019), in which Apple has been ordered to give a man access to his deceased husband’s account.

When Ric Swezey died unexpectedly in 2017, his will did not explicitly authorize his husband, Nicholas Scandalios, to have access to any of his digital assets, thereby preventing access to many family photos in his iTunes and iCloud accounts.

According to Apple iCloud’s terms and conditions, “any rights to your Apple ID or content within your account terminate upon your death,” unless required by law.

The New York County Surrogate’s Court relied on s13-A, administration of digital assets, of the New York Consolidated Laws, Estates, Powers and Trusts Law, finding that digital assets can be divided into those that are electronic communications and those that are not. The Court found that the “disclosure of electronic communications, unlike disclosure of other digital assets, requires proof of a user's consent or a court order” but added that the “decedent's photographs stored in his Apple account are not ‘electronic communications’.”

While the state of New York has its own law on the issue (as per the above), most states follow the Uniform Law Commission’s Revised Uniform Fiduciary Access to Digital Assets Act, which greatly reduced executors’ authority to access digital assets, when revised in 2015.

Leigh Sagar TEP, Chairman of the STEP Digital Assets Special Interest Group, comments: “Although this case refers to laws in the US, it is universally the case that all persons using and controlling digital data should be able to have some control over the use and enjoyment of that data after death or incapacity. It is important that their personal representatives and attorneys are able to find and access their computing devices, including crypto-asset wallets.”

“Modern devices, such as mobile phones, are supplied with security that is difficult to break in normal circumstances and supplying passwords for access to these devices can provide comfort. But these modern devices tend to be used to store all kinds of important and personal information whose privacy should be protected, so that it is essential that passwords be kept in a safe place until needed.”

The Digital Assets Special Interest Group was established in recognition of the need for practitioners to effectively assist clients and their fiduciaries in planning for and administering digital assets after the individual dies or loses capacity.

Sources