Digital Assets: A Clearer Definition

Recently we reviewed draft legislation for incorporating digital assets into estates law in North Carolina. In doing so, we questioned our working definition of digital assets, which created ambiguity between digital assets (the files) and digital accounts (access rights to files). The account/asset distinction is important, as it relates to requirements placed on service providers.

If you consider email, access to the account and copies of the emails (the assets) are two very different things. In the latter case, a service provider can be compelled to provide copies of emails (as in the case of Ellsworth and Yahoo).

Considering that email is the go-to identity mechanism on the Internet, it simply isn’t acceptable to provide the assets without providing access to the account:

• Looking to an example, executors commonly obtain access to the postal box of the decedent, for the purposes of conducting the estate. The Supreme Court has ruled that “E-mail is ‘comparable in principle to sending a first class letter . . .’.” (People v. Lipsitz, 1997). If an email is then equivalent to a letter, then the executor should have the ability to receive the email messages of the decent.
• Looking to practicality, an email address functions as a master-key to other online accounts (via password reset messages, etc.) and serves as an important index of most online activity.
• While it may seem inappropriate for an executor to send email on behalf of the decent, it’s not unreasonable that an auto-reply or manual notification be provided to email senders who may not be aware of the account owner’s passing.

This example shows the importance of considering access to the account differently than access to the assets. As such, we have expanded our working definition to include this distinction.

Digital Assets

The term “digital assets” means, but is not limited to, files, including but not limited to, emails, documents, images, audio, video, and similar digital files which currently exists or may exist as technology develops or such comparable items as technology develops, stored on digital devices, including, but not limited to, desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar digital device which currently exists or may exist as technology develops or such comparable items as technology develops, regardless of the ownership of the physical device upon which the digital asset is stored.

Digital Accounts

The term “digital accounts” means, but is not limited to, email accounts, software licenses, social network accounts, social media accounts, file sharing accounts, financial management accounts, domain registration accounts, domain name service accounts, web hosting accounts, tax preparation service accounts, online stores, affiliate programs, other online accounts which currently exist or may exist as technology develops or such comparable items as technology develops.

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