July 18th, 2016 – We live in an increasingly digitalized world, one in which you can now catch Pokémon while walking the dog, taking the train to work, or going for your morning run. The Pokémon Go game has been one of the most successful digital games to date, pushing Nintendo’s valuation by $7.5 billion and increasing the stock price dramatically. As more people use the application, spend countless hours playing, use real currency to make in-game purchases, and level up their Pokémon, end users will also begin to start placing real value, financial and sentimental, on their game progress.
However, what happens when someone dies in real life? What happens to their in-game purchases, Pokémon Go progress, and other accounts like Facebook, Twitter, and Gmail? Well, the answer is both simple and extremely complex. The short answer is that all of these digital games, applications, and accounts have some type of property right attached and when you die the assets become part of your digital estate. However, what happens to the games and other assets once they are in your digital estate is not always easy to answer.
To figure out what happens to digital assets in an estate there are few places to look. First, you need to look at the prevailing state and federal law. Today, the law is fairly far behind with regards to digital assets, which is not surprising as the law tends to lag very far behind technology. Twenty years ago, there was not a significant amount of wealth held in digital assets, but today the amount of wealth held electronically is starting to skyrocket with the advent of digital currencies, like Bitcoin, and games like Pokémon Go. At the Federal level, there is really no direct authority on digital assets.
However, at the state level, a variety of states including Maryland, Delaware, and Michigan have enacted legislation to allow a fiduciary or executor to get access to certain digital assets upon the death of the owner. States have tried to move the needle by requiring access to the assets and by attempting to treat the assets like any other physical assets you might own when you die.
If digital assets are treated like other more traditional assets under the law, then your will, trust, or state succession laws would determine how these accounts are transferred upon your death. So, you do need a good estate plan in place to be able to transfer these assets upon death. However, in some cases you won’t want to transfer the asset but instead have someone delete or erase the account upon your death.
This is especially true if there is any account that has stored credit card or other financial information that could impact your heirs. This includes accounts like Home Depot, which was hacked last year and personal financial information was lost. As such, you should direct your executor to manage and delete any accounts that could be subject to post-mortem theft, which has been growing in recent years due to online accounts.
Unfortunately, traditional estate planning devices like wills and trusts will not be entirely sufficient when it comes to digital assets. First, many of the Service Agreements, those giant contracts you skip through and click “I agree” at the end without reading, that you enter into when signing up for an application like Pokémon Go or Facebook put restrictions on your ability to share passwords, usernames, or even transfer the account. In fact, Pokémon Go’s contract gives you a “limited nonexclusive, nontransferable, non-sublicensable license” to the application. It goes on further to say you cannot transfer it or rent it to anyone. What this means is under the terms of the contract you agreed to when signing up with Pokémon Go, you cannot transfer this digital asset upon your death, In fact, all your rights end when you die. The agreement even discussed virtual money, the in-game purchases you make with real money. Pokémon Go states that this digital currency is nontransferable also (Perhaps most interesting is that the agreement states that you grant them a transferable and royalty-free right to any feedback you give about the game.) But unfortunately, it looks like Pikachu will be forever captured upon the account owner’s death.
But in the end, pun intended, digital assets are often governed by a mix of documents and state laws. First, if you have a digital asset or account that has a lot of value, make sure it is transferable. Unfortunately, you might have to read that agreement. Secondly, make sure your will mentions digital assets. Attorneys are just starting to get around to this type of specific estate planning, but your will or trust should specifically mention access and transferability of digital assets.
Lastly, check and see if your state laws provide any additional protections to your digital estate. If your state does not have a law in place, you might have to do a bit more planning, which should include keeping a list of all your online accounts and digital assets, the passwords, and the usernames so your family or heirs can access the accounts after you die. As digital assets grow in importance make sure you are taking some steps to understand your rights and develop a plan for their management and disposition upon your death. I know it might not be as fun as playing Pokémon Go, but spend the time to get a well developed digital estate plan in place.
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