How are the technologies around AI, digital assets and other areas affecting considerations around estate planning?
Regular Family Wealth Report contributor Matthew Erskine,
managing partner, Erskine &
Erskine, the law firm, examines how artificial intelligence,
digital assets and estate planning come together – or collide.
This is an example of how a long-established field of work –
estate planning – is being affected rapidly by modern
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The latest news is that the Screenwriters strike in Hollywood has now come to an end, but the Actor's Union, SAG-AFTA, remains on strike. One of the key issues at hand is a proposal that would allow the perpetual use of AI-generated replicas of background actors in exchange for a single day's pay. This proposal has sparked concerns about the growing trend of studios using artificial intelligence to replace human performers and creative individuals. It's not just actors who are affected; this issue has implications for everyone, as AI becomes increasingly capable of replicating voices and images from digital assets. This situation highlights the importance of including digital assets in your estate plan.
First, let's understand the term "Digital Assets." Your digital assets encompass electronic records in which you hold rights or interests. This includes records stored on devices, websites, and digital properties like bitcoin or non-fungible tokens (NFTs). It also includes records that catalog the contents of electronic communications, such as emails, text messages, images, music, social media, financial accounts, and gaming avatars. However, it's important to note that it doesn't include underlying assets like physical artwork, unless they exist in digital form, such as bitcoin or NFTs.
]There are four other terms that are essential to know: fiduciary, user, custodian, and Terms of Service Agreement (TOSA):
-- A Fiduciary refers not only to a Trustee or Personal
Representative but also to an agent appointed by a Durable Power
of Attorney and a Guardian;
-- A User is anyone who has access to an account involving digital assets;
-- A Custodian is anyone responsible for carrying, maintaining, processing, receiving, or storing digital assets. This includes email providers, platforms like Facebook and LinkedIn, and financial institutions that hold electronic financial records; and
-- Terms of Service Agreements (TOSA) are the agreements that govern the relationship between the custodian and the user. Although often overlooked, these agreements are binding but tend to go unread.
Access to digital assets and preventing unauthorized use of personal information is not straightforward. Access is initially controlled by the Custodian or Platform, such as Facebook's Legacy Contact. Next, it is governed by the TOSA, an agreement that is often ignored and can be changed by the Custodian at any time. Finally, access is determined by your Will or Trust. However, for some, these measures may not be sufficient, and they may seek ways to avoid digital immortality. For example, Robin Williams safeguarded his family's post-mortem right to publicity by owning property in a state that recognizes this right, creating a corporation to transfer the right to; and, including a granting clause in their Will or Trust that assigns the corporation the post-mortem right to publicity, along with instructions on how it should or should not be used.
Here's a checklist for estate planning involving digital
1. Create an inventory of your digital assets, including email and social media accounts, domain name ownership, and online gaming assets;
2. Use the online tools provided by custodians on their platforms, such as legacy contact options for Facebook;
3. Back up non-confidential material that can be easily transferred to other media;
4. For photographs and personal items of high emotional value (with little financial value), use services that allow multiple people access; and
5. Provide instructions on how to access digital assets, including usernames and passwords, available to your fiduciary if needed.
One aspect that remains unclear when designing a digital asset estate plan is how to address the monopolistic power of the platform on which the digital assets are stored and accessed. This applies not only to platforms like Facebook but also to platforms like Uber and Google. These platforms play a crucial role in data ownership and can monitor users, influence over-participation and over-consumption, sell user information (remember, if it's free, you're the product), and significantly shape a user's identity, relationships, and memories.
Considering the dominant position of such platforms, it may be
advisable to plan for the conversion of your digital assets into
tangible form and ensure your digital presence "disappears"
rather than continue beyond your control after your passing.