Is Your Estate Plan Keeping Up with the Digital Age?
Who will get to read your emails and blog posts when you die?
Can my kids get copies of my digital photos and mp3 music files after I pass away?
The North Carolina legislature recently answered that question by passing the Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”). North Carolina General Statutes Chapter 36F. The passage of this Act addresses a long-standing need for regulation in the area of control over our digital assets. Society is ever-reliant on technology in our functioning lives, but until recently North Carolina had no law in place to address how these digital assets are to be managed when one becomes incapacitated or passes away.
What Counts as a Digital Asset?
The Act defines a digital asset as “an electronic record in which an individual has a right or interest.” N.C.G.S. § 36F-2(10). This includes social media accounts, email accounts, iTunes and other music accounts, blog sites, online storage sites and potentially any other website or medium where an individual has an online account or has previously engaged in an online transaction.
Why the Act Was Needed
Prior to the Uniform Laws Commission taking up the effort to draft a uniform law for the states, individuals’ use of their digital assets was controlled almost entirely via the individuals’ contractual relationships with the service providers. These “Terms of Service”, drafted by the service providers, gave users very little flexibility with regard to what happened when they became incapacitated or died.
Yahoo, for example, previously did not allow any access to an email account after death and permanently deleted any content in that email account upon notification of death. The text below comes from a prior version of Yahoo’s User Agreement:
“No right of survivorship and non-transferability. You agree that your Yahoo account is non-transferable and any rights to your Yahoo ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.”
Emails with important details and files regarding financial matters or business deals, sentimental emails among family members, digital photos, and other important information or files that resided within an individual’s Yahoo email account would be wiped away immediately and permanently.
Prior to the Act, when someone became incapacitated or died, a validly executed power-of-attorney or will would have no effect to over-ride these Terms of Service. Court actions attempting an over-ride were expensive to obtain and rarely successful.
Who Does the Act Effect?
The Act is somewhat limited in that it only grants authority over digital assets to those acting in a Fiduciary capacity, i.e., Executors or Administrators of an Estate, Agents under a Power of Attorney, Guardians, and Trustees (“Fiduciary”). However, the importance of the Act is universal as it affects any individual that owns a digital asset. The Act now empowers every individual with the ability to make affirmative choices regarding the disposition and management of their digital assets upon their death or incapacity.
Managing Digital Assets
“Wait a minute…I’ve got my mp3 files on my computers and I’m going to leave them to my children in my will…they’re mine so no problem, right?”
This is a common and incorrect misconception. A digital music file is indeed a digital asset. The individual does not own the song. The individual’s interest in that music is a limited license to listen to that music that was granted by the copyright owner. That copyright license is not transferable just because an individual owns a copy of the music file. Giving someone else a copy of those songs is a violation of copyright law.
Managing digital assets is more complex than identifying an individual’s email accounts and how to access them. Digital assets are governed by a diverse and broad set of laws at both the state and federal level. Estate and trust law, copyright law, data privacy laws, and computer access and hacking laws all come into play when managing digital assets. Interwoven among these complex set of laws are the individual Terms of Service mentioned above.
Email communications can have a presumption of privacy and email content is covered by various privacy and computer hacking laws. As a result, email providers have worried about their liability for allowing third parties to access a deceased individual’s email accounts. The Act addresses those privacy concerns by requiring that specific affirmative consent be granted by the account owner.
Some service providers have created an online tool located in the account settings that allow a user to determine what happens to their account when the pass or become incapacitated. For those digital assets, the online tool provides that consent, but only for that particular account. It is imperative that estate planning documents are updated to make sure all other digital assets can be accessed after death or incapacitation. The estate planning documents also provide the flexibility to provide individual instructions for each digital asset in someone’s portfolio.
The Act also requires the Fiduciary to verify the account at issue belongs to the account holder and provide copies of the document giving the Fiduciary authority over the account holder’s affairs, among other things. These examples are why it is critical to engage an expert who can help navigate these complexities when managing and planning for the disposition of digital assets.
Practical Tips for Considering Digital Assets in an Estate Plan
With the level of complexity involved in managing digital assets, steps need to be taken to protect one’s digital legacy.
1. Understanding what Digital Assets You Have
Individuals should understand the nature of their digital assets and document the online accounts and other digital assets they have. Keeping an updated password list will make the job of the Fiduciary much simpler when the time for the Fiduciary to take action arrives. However, do not share these passwords or the location of these passwords with just anyone so that your accounts do not become subject to unauthorized access.
2. Terms of Service
Use of Digital Assets are covered by a Terms of Service. These agreements may over-ride local laws and only provide limited alternative to manager Digital Assets after death or incapacity. An individual must understand what their rights are under these Terms of Service as a Fiduciary will be limited to the same extent the individual would be. This may require the individual to take affirmative action prior to death of incapacitation to preserve certain digital assets that may not allow fiduciary access.
3. Understand the Rights you have in your Digital Assets
Having an understanding what rights you have in digital assets is crucial. Are there copyright license restrictions in order? Will I be violating a license agreement? A Fiduciary also has certain duties under the law. Does the Fiduciary understand their legal duties of loyalty, care, and confidentiality under the Act? It is also critical for an individual to understand the Terms of Service in place for each digital assets. Some service providers do not allow third party access at death or incapacitation regardless of instructions left in an estate plan. For these assets, the individual may need to take affirmative steps earlier in life to preserve the records in these accounts. These should be addressed carefully and outside assistance by someone with experience in the area may be appropriate.
4. Update your estate plan.
The ability to allow a Fiduciary to access digital assets after death or incapacity requires that the digital asset owner provide the consent to do so. Granting a Fiduciary access to digital assets in a will and power of attorney is one way to show this consent under the Act. An individual should contact an attorney to make sure their will and power of attorney specifically address that individual’s digital assets.
The passage of the Uniform Fiduciary Access to Digital Assets Act in North Carolina is a great step forward in allowing individuals more autonomy over their digital assets. They are no longer reliant on extreme restrictions that were previously contained in individual Terms of Service. Individuals should take this new opportunity to affirmatively plan for their digital legacy and engage the assistance needed to navigate the new complexities that come with this opportunity.
China's Push Toward Excellence Delivers a Global Robotics Investment Opportunity
Written by: Jeremie Capron
China is on a mission to change its reputation from a manufacturer of cheap, mass-produced goods to a world leader in high quality manufacturing. If that surprises you, you’re not the only one.
For decades, China has been synonymous with the word cheap. But times are changing, and much of that change is reliant on the adoption of robotics, automation, and artificial intelligence, or RAAI (pronounced “ray”). For investors, this shift is driving a major opportunity to capture growth and returns rooted in China’s rapidly increasing demand for RAAI technologies.
You may have heard of ‘Made in China 2025,’ the strategy announced in 2015 by the central government aimed at remaking its industrial sector into a global leader in high-technology products and advanced manufacturing techniques. Unlike some public relations announcements, this one is much more than just a marketing tagline. Heavily subsidized by the Chinese government, the program is focused on generating major investments in automated manufacturing processes, also referred to as Industry 4.0 technologies, in an effort to drive a massive transformation across every sector of manufacturing. The program aims to overhaul the infrastructure of China’s manufacturing industry by not only driving down costs, but also—and perhaps most importantly—by improving the quality of everything it manufactures, from textiles to automobiles to electronic components.
Already, China has become what is arguably the most exciting robotics market in the world. The numbers speak for themselves. In 2016 alone, more than 87,000 robots were sold in the country, representing a year-over-year increase of 27%, according to the International Federation of Robotics. Last month’s World Robot Conference 2017 in Beijing brought together nearly 300 artificial intelligence (AI) specialists and representatives of over 150 robotics enterprises, making it one of the world’s largest robotics-focused conference in the world to date. That’s quite a transition for a country that wasn’t even on the map in the area of robotics only a decade ago.
As impressive as that may be, what’s even more exciting for anyone with an eye on the robotics industry is the fact that this growth represents only a tiny fraction of the potential for robotics penetration across China’s manufacturing facilities—and for investors in the companies that are delivering or are poised to deliver on the promise of RAAI-driven manufacturing advancements.
Despite its commitment to leverage the power of robotics, automation and AI to meet its aggressive ‘Made in China 2025’ goals, at the moment China has only 1 robot in place for every 250 manufacturing workers. Compare that to countries like Germany and Japan, where manufacturers utilize an average of one robot for every 30 human workers. Even if China were simply trying to catch up to other countries’ use of robotics, those numbers would signal immense near-term growth. But China is on a mission to do much more than achieve the status quo. The result? According to a recent report by the International Federation of Robotics (IFR), in 2019 as much as 40% of the worldwide market volume of industrial robots could be sold in China alone.
To understand how the country can support such grand growth, just take a look at where and why robotics is being applied today. While the automotive sector has historically been the largest buyer of robots, China’s strategy reaches far and wide to include a wide variety of future-oriented manufacturing processes and industries.
Electronics is a key example. In fact, the electrical and electronics industry surpassed the automotive industry as the top buyer of robotics in 2016, with sales up 75% to almost 30,000 units. Assemblers such as Foxconn rely on thousands of workers to assemble today’s new iPhones. Until recently, the assembly of these highly delicate components required a level of human dexterity that robots simply could not match, as well as human vision to help ensure accuracy and quality. But recent advancements in robotics are changing all that. Industrial robots already have the ability to handle many of the miniature components in today’s smart phones. Very soon, these robots are expected to have the skills to bolster the human workforce, significantly increasing manufacturing capacity. Newer, more dexterous industrial robots are expected to significantly reduce human error during the assembly process of even the most fragile components, including the recently announced OLED (organic light-emitting diode) screens that Samsung and Apple introduced on their latest mobile devices including the iPhone X. Advancements in computer vision are transforming how critical quality checks are performed on these and many other electronic devices. All of these innovations are coming together at just the right time for a country that is striving to create the world’s most advanced manufacturing climate.
Clearly, China’s trajectory in the area of RAAI is in hyper drive. For investors who are seeking a tool to leverage this opportunity in an intelligent and perhaps unexpected way, the ROBO Global Robotics & Automation Index may help. The ROBO Index already offers a vast exposure to China’s potential growth due to the depth and breadth of the robotics and automation supply chain. As China continues to improve its manufacturing processes to meet its 2025 initiative, every supplier across China’s far-reaching supply chains will benefit. Wherever they are located, suppliers of RAAI-related components—reduction gears, sensors, linear motion systems, controllers, and so much more—are bracing for spikes in demand as China pushes to turn its dream into a reality.
Today, around 13% of the revenues generated by the ROBO Global Index members are driven by China’s investments in robotics and automation. Tomorrow? It’s hard to say. But one thing is for certain: China’s commitment to improving the quality and cost-efficiency of its manufacturing facilities is showing no signs of slowing down—and its reliance on robotics, automation, and artificial intelligence is vital to its success.
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