Category: Business Succession
Tags: Asset Protection, Estate Planning, Powers of Attorney

North Carolina Bill Affecting Digital Assets

Posted on: March 30th, 2013
digital estate planning north carolinaRecently we reviewed the challenges of digital estate planning—the ways surviving family members’ access to a decedent’s online accounts are affected—and how accessibility is determined by individual account policies. With no North Carolina laws governing digital afterlife yet, many families have struggled to gain access to online banking, investments, frequent flyer miles, and more.
Last week a bill was filed in North Carolina that proposes amendments to estate, trust and guardianship laws specific to digital assets and accounts. The bill would add a new section to the North Carolina General Power of Attorney form. If the bill is enacted into law, the same form that appoints a representative to handle their tax matters and finances in the event of incapacitation will also cover digital assets.
  • What is considered a digital asset? The bill recognizes the following digital assets in North Carolina: Emails, documents, images, audio and video files, and similar formats.
  • What is a digital account under the North Carolina bill? Digital accounts are classified as those supporting: Email, software licenses, social network and media, file sharing, web hosting, financial management accounts, domain registrations, online stories, tax preparation accounts, affiliates and any online account.
The language in the bill recognizes the rapid rate at which technology advances. With this in mind, definitions of the above encompass future digital file formats and accounts that may not exist yet and that may be stored on any digital device, regardless of the device’s ownership.
An attorney-in-fact, custodian, or guardian will be able to manage a decedent’s digital accounts and assets in North Carolina. The bill will grant them the authority to terminate, dispose of, or continue the use of the digital assets and accounts. If there is a validpower of attorney, the attorney-in-fact must make a written request for access to the digital accounts and assets and include a copy of the power of attorney.
Preservation of digital accounts is often vital for surviving family members to maintain access to records for which there may be no hard copies. Social media accounts may seem secondary, but for some who operate e-commerce or other web-reliant businesses, without an active virtual presence the business their family was to inherit may be at risk. New companies like DeadSocial, If I Die, and _LivesOn are just a few organizations tapping into the post-death digital market by maintaining “ghost” Facebook and Twitter accounts. For a decedent whose social media supported a business and livelihood for his or her family, legal access to these services would help beneficiaries and business partners continue running their business.
Until the bill is enacted, access to digital assets is determined by each account’s policies. This makes estate administration even more complex. Work with a North Carolina estate planning attorney to navigate these policies. Once the act is effective, review and update estate plans in North Carolina to ensure access to digital accounts is not lost along with the decedent.
UPDATE: The bill was signed into law, but did not ultimately include the provisions addressing digital assets.
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