Keywords

1 Introduction

Certain parts of inheritance law have not changed much since Roman law.Footnote 1 Law students in most countries are still only learning about traditional features: e.g., conventional forms and types of wills and a long-established content of the estate (decedent’s movable and immovable property that passes on to his/her heirs). However, traditional legal institutes are influenced by (modern) life and new circumstances. More than ever before, the datafication of society changes our lives at tremendous speed.Footnote 2 This chapter focuses on one problem associated with these changes, namely the inheritance of digital assets (digital inheritance).Footnote 3

Most people acquire numerous digital assets during their lifetimes and these assets remain in existence long after they die. These assets are intangible in nature, stored on different media, or on clouds, they are frequently protected by passwords or encrypted and many times, they are located on online platforms’Footnote 4 servers that have strict rules about who will have access to them. Numerous authors agree that many of these assets are of great value, not only monetary, but also emotional and historical.Footnote 5 Although most people have lots of digital assets of varying value, many of them do not even understand their meaning, let alone, what will happen to these assets after they die.Footnote 6

This also applies to legislators: few countries in the world have directly addressed the issue of digital inheritance and passed laws that regulate it. One of them is, France, which enacted a law in 2018 that, in its Art. 63, regulates what will happen to person’s data in a digital form, after he/she dies.Footnote 7 Even if a decedent has not left specific instructions, according to the same article, his/her heirs will have the right to access certain information in order to gain insight into decedent’s inheritance or obtain certain digital assets that are of persona value to the family.Footnote 8 On the other hand, Germany might not have legislation concerning digital inheritance, but there is an important case where a court granted young girl’s parents access to her Facebook profile.Footnote 9 After Facebook appealed that decision, court of appeal in Berlin in 2017 ruled completely the opposite and access to Facebook account was refused. The court claimed that they did not reach such a decision only to protect decedent’s privacy, but also the privacy of all of her contacts she communicated with.Footnote 10 However, the Federal Supreme Court vacated court of appeal’s decision and finally granted parents access to the account and its content.Footnote 11 This was a highly publicized case in the EU and because of it many people have started thinking about something they might have never thought about before. USA also has legislation dealing with digital assets and the death of their holder (more infra). However, most countries do not have legislation nor case law dealing with what happens to someone’s digital assets when he/she dies. Therefore, it seems as if most countries and their legislators do not know what to do with this problem.

The number and value of this new type of assets will only grow and it is time to start implementing them into property law, law of obligations and, as this chapter shows, into inheritance law. Therefore, it is imperative to start teaching law students about the importance of these assets; their characteristics; differences between them and how to treat them, both while their owner/user is alive and after he/she dies. As some scholars have stated, if we do not react now, the “rule of technology” instead of the “rule of law” will govern this aspect of our lives (or “the rule of the cloud”, instead of “rule of the land”).Footnote 12

2 Digital Assets

Many digital assets have certain value. For example, cryptocurrencies,Footnote 13 assets in online games,Footnote 14 various digital content purchased from different online platforms, all have real monetary value.Footnote 15 However, most peoples’ digital assets value is not monetary. These assets mostly have only emotional value for their owner/user and his/her family and friends.Footnote 16 In addition, today many people conduct their businesses online: they sell and buy goods and services on the Internet, they communicate with their clients online, they keep all, or most of their information in a digital form. Therefore, all of these assets are extremely important to business owners and to their heirs.Footnote 17 Also, if a digital asset belonged to someone famous (to a celebrity, scientist or a politician), they might be important for the public in general. Historians and fans would also have an interest in those assets.Footnote 18

Because of all of this, the question as to whether digital assets are inheritable is important, and its importance will probably grow with time. Heirs are typically interested in inheriting anything that belonged to the decedent and had real monetary value. They also want to inherit something that has great emotional value for them and their family. Also, if they are inheriting the business of a decedent, it is important for heirs to inherit anything tied to that business, whether it is physical or digital.Footnote 19 However, the possibility of inheriting digital assets is faced with many problems.

One of the main problems concerning digital assets is that they remain undefined. There is still no straightforward definition of what a digital asset is; therefore, it is not certain how to treat them and what rules to apply to them. When talking about these assets, different authors usually mention emails and email accounts; social media profiles; blogs; music, photo and video collections; online bank accounts; shopping sites, domain names, online subscriptions; business information, loyalty programs.Footnote 20

As was said in the introductory part, not many countries have specific rules about digital assets in general, especially about their inheritability. However, the United States (U.S.) adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which is a leading act concerning digital assets. It defines digital assets as electronic records in which individuals have rights or interests.Footnote 21 A record is defined as information recorded on a tangible medium, or stored in an electronic or other medium, which can be retrieved in visible form. Electronic is defined as having electrical, digital, magnetic, wireless, optical, electromagnetic or similar characteristics.Footnote 22

In the literature, different authors divide digital assets into different groups. The following are some of those divisions according to various criteria:

(1) (a) online accounts and (b) files stored on various devices and cloud servicesa

(2) (a) digital assets that fall under the rules of contract for digital services and (b) the ones that are provided by a way of licenseb

(3) (a) intangible items, (b) information about property, (c) intellectual property and (d) personal datac

(4) (a) electronic documents, (b) social media, (c) financial assets, (d) business assets and (e) miscellaneous assetsd

  1. a Jin Park et al. (2020), 3.
  2. b Berlee (2017), 257–260.
  3. c Birnhack and Morse (2022), 285.
  4. d Manicad and Perez (2018), 392.

It is understandable that there is a problem in defining digital assets, because they can be divided by applying many different criteria, many of them overlap and they change constantly. But the mentioned categories give a pretty good overview on what this term encompasses.

3 Digital Assets and Inheritance Law

For inheritability of a digital asset, it is important to note that one solution regarding one type of digital asset will not fit other types. Therefore, this chapter divides digital assets into four main categories. By applying this division, issues concerning inheritability of the assets can simply and effectively be explained (to readers, students and others). Of course, there are other types of digital assets that might not fall into any of these groups. However, the author decided to use these, because most people’s digital assets fall into at least one of these categories.

These categories are as follows:

(1) digital assets stored on an electronic device (or a similar medium), created by the owner of the device

(2) digital accounts and its content, stored on online platforms’ servers

(3) digital assets that have been purchased from online platforms

(4) cryptocurrencies

3.1 Digital Assets Stored on Electronic Devices, Created by the Owner

Inheritability of these digital assets is probably least problematic. Decedent’s heirs who inherit those devices, under existing inheritance rules, will inherit these assets. These assets usually consist of photos created by the decedent; his/her manuscripts; videos and music. Most of us have computers, laptops, smartphones and flash drives full of digital assets like this. Some of those assets might be worth a lot of money, but usually they will only hold emotional value for family and friends of a decedent. In addition, many of these items are copyright protected, but since copyright is inheritable, this will not be an obstacle to inheritance.

When it comes to inheritability, the biggest problem with digital assets such as these is that they are often protected by a password or can only be accessed through some biometric measurement. Therefore, if heirs do not know the password for a device of a decedent, they will not have access to assets stored on it. This is what happened after a world-renowned composer Leonard Bernstein died in 1990 and left his password protected autobiography on his computer. He had been working on it for more than two years and nobody has had any luck in accessing it, since he passed away.Footnote 23 Therefore, a great piece of music history is lost, simply because nobody knew the password and Bernstein did not leave it to his heirs in a will or some other document. This cannot be considered as an unusual occurrence, since most people still do not think that it is important to take care of such matters, let alone over 30 years ago.

3.2 Digital Assets Stored on Online Platforms’ Servers

Most people have email accounts, accounts in social networks, on dating sites, to access cloud services, etc. On a daily basis, they put content on those accounts. When it comes to the ownership of such content, it is usually stated that it belongs to the user. For example, Facebook is one of the most popular social networking services which, in accordance with Art. 3 of EU Digital Markets Act (DMA), falls into the category of “gatekeepers”.Footnote 24 Facebook’s terms and condition state, “You own all of the content and information you post on Facebook”.Footnote 25 However, Facebook owns the accounts, and decides what will happen to them after a user dies.Footnote 26 When it comes to most online platforms, after users die, the accounts and its content will probably not pass on to their heirs. The reason for this is that, before users set up their accounts, they had to agree to platforms’ terms and conditions. Most of those terms and conditions today prohibit access to a user account to anyone else other than the user, and that includes heirs.Footnote 27 Few of them explicitly forbid inheritance, but almost all of them state that „the user’s rights under the contract are non-assignable” which also prevents inheritability of such assets.Footnote 28

One would think that the easiest way would be for people to leave their heirs passwords to their accounts. However, most, if not all online platforms forbid this.Footnote 29 If this were done, and a platform discovered it, it could lead to termination of an account or at least to an online platform changing login information so nobody could access decedent’s account again.Footnote 30

These digital assets raise the most issues when it comes to inheritability. There are valid reasons for disallowing inheritance. For example, many digital assets stored on digital accounts consist of personal data. The 2016 EU General Data Protection Regulation (GDPR) in its Art. 4 determines that personal data is data that can identify someone.Footnote 31 Therefore, if inherited, these accounts can reveal a lot about a person and users might not want this to happen. However, even if some users might want to share their personal information with their heirs, the problem is that through those same accounts, a lot can be discovered about anybody a user ever communicated with. Those persons most certainly would not wish their personal information to be passed down to someone they possibly do not know.Footnote 32 Privacy protection is actually one of the main reasons why online platforms do not let decedent’s digital assets stored on their servers to be inherited—they aim to protect users’ privacy (consequently, also the privacy of everybody who communicated with a user) and they also aim to avoid possible liability if they were to reveal private information.Footnote 33 As was mentioned earlier, this was the reason behind Berlin’s court of appeal refusing parents of a deceased girl access to her Facebook profile (see supra).

Nevertheless, sometimes inheritability of these digital assets is desirable. For example, the content of an account might comprise copyrighted works made by the decedent. In those instances, if online platforms deny heirs access, heirs will inherit copyright, but they will not be able to profit from the work of the descendent.Footnote 34 In addition, if a decedent had a successful business that was conducted mostly online, that business might go under, if heirs cannot access the owner’s accounts and files.Footnote 35 Many utility companies and banks send their bills or statements via email. Hence, if heirs cannot access them, bills will remain unpaid and heirs might not be aware of bank accounts that the decedent had, which they have inherited after his/her death.Footnote 36 On social media (Facebook for example), the posts of users can reveal their state of mind at a certain time. That is the reason why heirs (usually family members) often want to access these accounts after the user dies—they might want to get an insight into that person’s emotional state prior to death, especially if a person died of suicide or suspected suicide.Footnote 37 Social media is also used as a coping mechanism; it helps family and friends to process grief over death of a loved one.Footnote 38

Numerous interests need to be reconciled here, the main being those of online platforms, users, heirs, and third parties.Footnote 39 So far, most online platforms have taken a safe route and decided they will not let anyone access the account of the decedent, unless they have a court order, regardless of how advantageous inheritance of some of these assets could be.Footnote 40

However, not all online platforms have policies like the ones mentioned in this part. For example, some (Facebook, Google and Apple) have enacted rules that allow users, while they are still alive, to decide what will happen to their accounts post mortem.Footnote 41 These platforms have not done this on their own initiative or because users wanted it, but due to pressure from the media and the families of users.Footnote 42 However, these few actors are still outnumbered by a large majority, which do not provide any choice.Footnote 43

3.3 Digital Assets Purchased from ISPs

This group of digital assets also causes great controversies because many users realize only too late that they have not actually acquired ownership of content—such as e-books, music records, or videos—but merely purchased a license to use it.Footnote 44 Online platforms that “sell” digital content have strict rules that prohibit users any transfer of these assets.Footnote 45

Concerning this content, online platforms grant users a personal copyright license in respect of the purchased content, which does not form a part of the inheritance.Footnote 46 It is important to stress that these rules only apply to situations where users were granted a permission to download such content, not to the streamed content. In case of a download, a copy of a file must be stored in the long-term memory of a device the content is being downloaded to, which is a violation of copyright owner’s reproduction right.Footnote 47 In contrast, when streaming, data will be stored in the short-term memory of a device, which does not result in a copy saved in a long-term memory and does therefore not violate the copyright owner’s rights of reproduction. Licensing limitations also do not apply to works that are in public domain (e.g., works for which copyright has expired).Footnote 48

The fact that online platforms are only licensing these digital assets is not a problem: these platforms have the right to transfer this content under whichever conditions they choose. Therefore, if they want to grant users only a non-transferable license for the duration of their lives, and the users agree to that, those provisions should apply. The problem here is the fact that many users have no idea what they have agreed to, because they have not read the terms and conditions that regulate digital content purchase.Footnote 49 To prove this, online platforms have put some outrageous clauses in their terms and conditions, just to see how many users will notice. For example, a platform that offers free wi-fi put a so-called Herod clause, assigning user’s firstborn child to them.Footnote 50 A platform that sells online games added a clause that granted user’s soul to them.Footnote 51 In both of those cases, only a few users noticed these clauses and reacted, others automatically agreed to them.

Additionally, most people simply consider the terms and conditions unreadable.Footnote 52 They are usually long, complex and frequently updated and because of that, it is not feasible to expect an average user to go through the huge amount of text that they consist of.Footnote 53 Also, the most important clauses tend to be hidden behind a sea of text, so that even trained lawyers find them hard to understand. Hence, it is no surprise that users do not read them or understand them.Footnote 54

Here, the author would like to mention NFTs (non-fungible tokens) which can be linked to author's works in digital form (actually, any digital (even tangible) asset can be linked to NFT). These non-fungible tokens are based on blockchain that establishes a chain of ownership which eliminates counterfeiting of such assets.Footnote 55 Therefore, NFT represents a certificate of ownership over digital assets.Footnote 56 NFTs are usually mentioned in the context of games and digital art where a person can buy a character or an item in a game, or a piece of digital art.Footnote 57 However, they were recently also linked to virtual clothes, shoes, a house, hardware, music, music videos and the like.Footnote 58

What this technology might bring in the future, in regards of users being able to transfer digital content purchased from online platforms, can be illustrated by the example of books. Unlike an ordinary e-book, whose copy can be downloaded by anyone, the NFT book is connected by blockchain technology, which represents a direct connection (contract) between the author and the user. In this way, one acquires an NFT book similar to how one would acquire it in the physical world—a person acquires his/her own copy which he/she can later transfer to whomever. Therefore, this technology represents a way to create a second-hand market for digital books and similar content, which is today impossible.Footnote 59 This technology has existed since 2017, but has not yet become mainstream as far as digital assets covered in this part of the chapter are concerned (books, music, movies, etc.).Footnote 60 However, it seems that the future will potentially bring more and more conversions of such assets into NFTs and enable secondary market for them, along with possible transfer post mortem.

3.4 Cryptocurrencies

Cryptocurrency is a currency, which uses cryptography to enable electronic payments without an intermediary bank or a financial institution.Footnote 61 Some of the main characteristics of cryptocurrencies, which are so attractive to their owners during their life, become a problem (even a possible obstacle) to their inheritance. Namely, cryptocurrencies are impersonal, their owner is not recorded anywhere or entered into any register, and a certificate of ownership cannot be obtained.Footnote 62 At this point, it should be noted that the word “owner” is used here with a measure of caution, given that there is still no consensus about whether these assets are objects of property rights or something else entirely.Footnote 63 Precisely because of these characteristics, the possibility of exercising any rights over cryptocurrencies depends on access to a special crypto wallet. The wallet cannot be accessed without a private key (a password), even if the owner wanted someone to access it or if, for example, there was a court order granting access to a crypto wallet.Footnote 64 This is mentioned here because heirs, who did not have login information, were able to access dead user’s email and other accounts after obtaining a court order that compelled online platforms to grant them access (see supra). However, in the case of a crypto wallet, for someone to be able to access it and dispose of the cryptocurrencies stored there, there is no other way to do so, unless that person has information necessary for access.

Intestate inheritance would certainly pose a problem for inheritance of cryptocurrencies, given that the intestate heirs might not even know that the decedent had cryptocurrencies, let alone how to access them (if they do not have necessary information, they need to access a crypto wallet). On the other hand, inheriting cryptocurrencies based on testate inheritance would certainly be possible and a will would be the simplest and most conventional way of bequeathing such assets.Footnote 65 In the will, the testator could announce to the heirs that he/she had cryptocurrencies, so they would know about that part of the estate. He/she could also share his/her public key for the crypto wallet. As for the information for accessing the wallet—a private key—it is important to note that the testator should never put this information in the will. The reason is that wills are read publicly at the probate hearing, and everyone present at the reading of the will could find out about this information and access the wallet, which is something a testator or his/her heirs would never want.Footnote 66 Therefore, if the testator decided to include his/her cryptocurrencies and a public key in a will, private key could be listed in a separate document that would not be an integral part of the will and would not be read publicly.Footnote 67 This document could be stored in a safe deposit box in a bank or in some similar safe place to which, after testator dies, only those whom the testator wanted would have access to.Footnote 68

Precisely because of the problems with inheritance of cryptocurrencies, a parallel could be drawn between them and the inheritance of digital assets stored on users’ devices (the first group of digital assets covered in this chapter). There are no formal obstacles to the inheritance of neither of these assets. However, if the heirs do not know whether they exist and how to access them, they would never be able to benefit from them. That is why it is important for the owner of cryptocurrencies to disclose to the heirs the existence of these assets and how to access them.

4 Digital Inheritance and the Law School Curriculum

In order to understand problems connected to digital inheritance, students of a law school curriculum would need to learn about various types of digital assets in their studies. The division that has been presented in this chapter offers one way to introduce students to the topic. While doing so, students could reflect about the status of each digital asset: for example, which one could be considered intangible property, which one could be considered as private and which one could be considered as something else. According to the stand they take, they would have to investigate which rules could be applied to which type of assets. For this to be done, students would need to have prior knowledge about property law, privacy law and contract law.

Furthermore, students would have to carry out research to identify examples of different legislations that have implemented rules on digital assets and their inheritability, into their legal systems. This would allow them to discover how similar rules could be implemented into legislations that still have no rules about this issue.

Finally, law students should be encouraged to draw parallels between their digital assets and the things they have learned about this topic. This could be done in the following way:

  1. 1.

    Concerning the first group of digital assets, students would be encouraged to give examples of different content that is stored on their devices and would need to decide what they would like to happen to that content, in case they died. By then, they would be made aware of the importance of letting their heirs know the passwords to their devices, if they wanted them to be inherited, so they would have to express how best to leave that information to their heirs—in a will or somewhere else.

  2. 2.

    Concerning the second group of assets, students could list all of their own accounts and profiles and discuss what would they want to happen to them if they passed away. They would need to examine chosen online platforms’ terms and conditions, both the ones that give users a choice to decide what will happen to their accounts, and those that do not. They would also be encouraged to make the choice themselves, if they have accounts or profiles with online platforms that allow choice.

  3. 3.

    Concerning the third group of assets, students would need to list digital content that they have purchased from online platforms. They would have to read their terms and conditions to find clauses that determine what rights they, as users, have over the respective content. They would also have to comment on how easy it was to find those clauses and how understandable they think terms and conditions were. They would need to investigate why online platforms do not transfer ownership of digital content and by doing so, they would learn about differences between the transfer of tangible copyright protected works and its digital counterpart. Students would also be encouraged to investigate the technology behind NFTs that are associated with various digital content and give specific examples of different images, music and other digital art linked to NFTs.

  4. 4.

    As for cryptocurrencies, students should become aware of the fact that they themselves have to take the necessary steps for these assets to be inheritable. First, they should be aware that probably the simplest way of bequeathing these assets is to make a will in which they would draw their heir’s attention to the existence of cryptocurrencies. Furthermore, they would need to choose the way in which they would inform their heirs of the access information to the crypto wallet. In the case of these digital assets, as with the first group listed here, it is important to be aware that without access data, heirs will not benefit from those assets.

5 Conclusion

Developments in technology have changed our lives in ways that only 10 years ago, most of us could never imagine. A huge part of our lives happens online, and that will only grow. Digital assets have monetary, emotional and historical value and many of them could, and should be inheritable. However, many opposing interests need to be reconciled if that is to happen. So far, this issue is, for the most part, ignored in existing private law curriculums (property law, law of obligations, inheritance and copyright law).

As was shown in this chapter, many different fields of law play a part in determining which rules should apply to digital assets, not only after their owner/user dies, but also while he/she is still alive. For students to understand issues concerning digital inheritance, they would first need to be taught about different types of digital assets, since the rules that apply to them depend on the type of digital asset in question. They would also have to understand why these rules exist in the first place, and how they influence the possibility of inheritance of certain types of digital assets. In addition, they would have to learn about different countries’ legislation on digital inheritance which would allow them to explore how similar rules could be implemented into their own legislation. Also, students would need to look at their own digital assets and analyze what could happen to those assets after they die, depending on the type of a digital asset and the rules that pertain to it.