New legal guidelines proposed for digital property and data after dying – Lawpath
It will propose new laws about what happens to your digital assets and records after you die. Find out the latest here.
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In March 2020, the NSW Legal Reform Commission made recommendations to the NSW Parliament for new laws regarding access to a person’s digital records and assets after their death. This signals the government’s recognition that online social activities and economics are increasingly integrated into our lives. Existing laws do not directly take into account what happens to a person’s digital possessions after they die or become incapacitated. The government is expected to use this recommendation as a basis when passing new laws to manage digital assets and records. Here we will first discuss what is meant by ‘digital assets’ and ‘digital records’ and then outline the main recommendations of the Commission.
What are “digital assets” and “digital records”?
The Commission’s report defines digital assets as digital materials that someone would consider to be their property. This includes everything from cryptocurrencies like bitcoins, digital photos on a person’s phone, or other digital works of art.
Digital records include digital assets, but also materials that technically people do not have full ownership rights over. This includes social media profiles, email accounts, online payment accounts, game avatars, digital music, and eBook collections.
Digital materials are of course different from physical materials for several reasons. First, they exist on platforms that are supported and controlled by third parties like Facebook, Google, and Paypal. Second, access information, such as a password, is often required to access these materials. Third, they do not deteriorate and could potentially last forever. The Commission has taken these unique aspects into account in its recommendations.
Adaptation to existing wills and inheritance laws
The commission found that it could adapt the basic principles of the existing wills and estate laws for the digital world. Two basic principles adapted by the Commission are as follows.
Hierarchy of rights
The Commission recommends that a hierarchy of rights define who should handle the digital records of a deceased person. This is in line with existing wills and probate laws, as the law gives priority to the deceased’s desires.
For example, a deceased person may have appointed an individual to be their permanent guardian or permanent authority. This is usually done through a will. If the will provides that this person can handle the digital records of the deceased, they are legally authorized to do so.
If no such person is appointed, an “online tool” authorized person can access the deceased’s digital records. “Online Tool” means a tool provided by a digital platform that allows users to give another person instructions or permissions to manage their account. These include, for example, the Legacy Contact tool from Facebook and the Inactive Account Manager tool from Google.
If no person has been appointed or authorized through an online tool, someone with access information to the deceased’s digital records (e.g. password) can access it. This is the case if the deceased personally gave them the passwords before they died. This does not apply to situations in which a person knows the password of accounts of deceased persons due to an employment or contractual relationship, unless the deceased person indicated otherwise before their death.
The authorized person would be empowered to manage and edit the deceased’s digital records. This includes the transmission of digital recordings to persons who are authorized by the will of the deceased. However, you would not have the right to edit the content of the digital records.
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For many people these days, digital records contain probably the most intimate information about their life. This includes photos in your social media accounts, sensitive emails, and embarrassing messages in your group chat. Aspects of your personal life that are highly sensitive, that you are not proud of, or that should only be shared for the selection of select people, will likely end up in someone else’s hands after you die. It will also be difficult to completely erase them. The Commission has therefore proposed laws related to the improper disclosure of information for digital records. These, in turn, coincide with the way guardians, attorneys, and executors are required to handle physical assets and records under existing will and probate laws.
Under the proposed law, it is generally a criminal offense for an authorized person to disclose information about digital records. This only applies if some exceptions apply. This includes whether the will allows it or whether disclosure of information is required to manage the deceased’s estate. The proposed law also makes it clear that laws relating to fiduciary duties apply. These laws require the authorized person not to abuse their position of trust and to act in good faith.
Online Platform Owner Rights
One element of digital records that is not covered by existing wills and probate laws is how online platforms work. People store much of their digital assets and records on online platforms owned by third parties. Online platforms may have ownership rights to some of the things that are used on their platforms. Other guidelines for inactive accounts may apply. The recommendations aim to protect the property rights of online platforms while at the same time establishing uniform laws for dealing with digital records and assets.
For example, the proposed law requires the authorized person to adhere to the online platform’s rules in managing and handling the digital records and assets of a deceased person. For example, suppose an online platform licenses music, movies, and eBooks to its account holders on a non-transferable basis. The person authorized to administer the estate of a deceased would not be able to leave the music and films to the beneficiaries of a will.
However, the proposed laws provide that an online platform that restricts the authorized person’s right to access certain digital records of the deceased should be made unenforceable. Therefore, this law overrides all guidelines of the online platform, even if the platform tries to apply the laws of another state or country. The aim is to make it easier for the family or other close contacts of the deceased to handle their digital assets and records across multiple platforms. It also ensures they don’t lose access to online materials that they consider to have strong sentimental value.
Today many of us occupy two worlds – the physical and the digital world. Just as many of our physical possessions will outlive us, so will our digital possessions and perhaps forever. These recommendations, proposed by the NSW Law Reform Commission, provide much-needed clarifications and instructions on how to manage a deceased’s digital assets and records. Although the government has not yet put them into law, they will take these recommendations into account when drafting new legislation on digital assets and records. You should check out this area and in the meantime, consider adding digital assets and records to your will.