Cloud computing is the ever-growing system of online companies providing services online as opposed to providing them through software that you would install on your own computer. In “the cloud”, everything from applications to storage to infrastructure is provided online, thereby giving users the ability to find their data on any networked computer, smart phone or tablet, even if it is not their own.
Today we examine the effects of the cloud in the United Kingdom and the United States, and provide several examples of where the law still has some unanswered questions regarding the cloud and its role in digital estate planning.
The “Generation Cloud” Study
Last week, the Centre for Creative and Social Technology (CAST) at Goldsmiths, University of London, released a study of U.K. internet use entitled “Generation Cloud”. The research, commissioned by Rackspace Hosting, a NYSE-traded company (RAX) specializing in hosting and cloud computing, surveyed 2,000 U.K. adults, and produced the following findings:
- British users have at least GBP 2.3 billion worth of digital assets (including personal videos, music, books, and photos) stored with in the cloud.
- 66% of the respondents use the cloud without realizing it.
- 11% have made provisions for their digital assets in their will, or are planning to.
- 53% have “treasured possessions” stored in the cloud.
Generation Cloud also identified four distinct groups of cloud users:
- “Head in the Clouds” – the aforementioned 66% of cloud users who don’t realize they are using it.
- “e-Hoarders” – 8% who store anything and everything in the cloud, including items they are afraid to delete.
- “Cloud Sceptics”– 20% who rely on the cloud but are still suspicious regarding who has control over their data (it is not hard to imagine that the U.S. percentage is probably a lot higher).
- “2020 Teenagers” – Pre-teen “digital natives” for whom the cloud is simply a way of life.
It appears that Brits are more aware and concerned about passing on their digital assets than we Yanks are. A recent article in the BBC further illuminates these findings. What is quite fascinating is how the writer and her interviewees find planning for digital assets to be “relatively straightforward”. For example, the article discusses options such as putting passwords in wills or using an online service to store passwords, categorize assets, and even leave provisions for a “Guardian” to maintain them or give them away.
More Complexity in the U.S.?
But is the matter so simple here across the pond? For instance, as of this date, there are no less than 39 online firms offering digital death and afterlife services, including 16 providing online digital estate planning. Why does there appear to be more complexity here?
Let’s examine some of the more interesting questions that remain unanswered here in the U.S. as evidence of why our solutions appear to be anything but “straightforward”:
Some service agreements limit the access to an account of anyone who is not named as its owner. Others clearly indicate that the account holder does not have any ownership of the digital account.
- Will these agreements be enforceable against decedents and personal representatives?
- Are they contracts of adhesion?
Access to Password as Property Right
As discussed in a recent law review article, if a decedent provides login information in a will, the beneficiary would not only gain access to the account information, but also full use of the account. However, this alone does not result in a legal transfer of the account itself.
- What if a digital executor shares files from this account with the decedent’s loved ones during probate?
- Does that person exercise too much discretion?
- If a website closes down and disappears, do the digital assets disappear with them?
- What if a person “cashes out” of the game? Does this create a taxable event?
- If a person’s account goes unclaimed, can it be deemed as part of his or her estate?
No Clear International Standard
Earlier this year, a U.K. judge prohibited the publishing of a life-support patient’s identity on Facebook or Twitter. However, as this article notes, because Facebook and Twitter are both U.S. companies, neither necessarily have to comply with this order. While this kind of order might create a chilling effect in some countries, the First Amendment of the U.S. Constitution enables us to be less restrictive and less restrained about what we can and cannot share online.
- If the cloud’s reach is worldwide, should international treaties or agreements be sought?
- Do we even want other nations to be able to enforce their rules on our online activities?
Preserving “Electronic Evidence”
In another recent U.K. case, four potential heirs were found guilty of a conspiracy to murder based on evidence that they searched Google for “1,000 ways to die”, “poisonous toadstools” and “easiest way to kill an old person”.
At first glance, it is easy to take the perspective that our digital assets should be our own property without restriction or interference.
- However, if we take this standpoint, then like other property, should these assets also be subject to searches, warrants, and confiscation, as well as civil and criminal penalties in case we attempt to wipe out useful data?
Digital Estate Planning Today
As we have discussed several times before, this area of the law is quite new. Until the questions like the ones above are resolved or at least seriously considered, we will be stuck in the dilemma that we have a greatly increasing need to account for digital assets in our estate plans, whereas our laws do not provide us with the same levels of simplicity or guidance that our British friends seem to enjoy.
- Survey: 11% of Brits Include Internet Passwords in Will (estatelaw.hullandhull.com)
- After death, Web ‘assets’ often tangled in cloud (canada.com)
- Government Searches of Cell Phones, Computers and Digital Property (www.digitalpassing.com)
- 5 Reasons Digital Estate Planning Hasn’t Caught On … Yet (estateplanninginfoblog.com)