1. © 2013 Northern Trust Corporation ServiceExpertiseIntegrityServiceExpertiseIntegrity northerntrust.com P R I N C I P L E S T H A T E N D U R E Digital Assets Jennifer J. Robinson Senior Legal Counsel Miami, Florida Ph. (305) 789-6300 E-mail: jr177@ntrs.com

2. 2 I. Why are digital assets important? II. What are digital assets? III.What are digital devices? IV. Why is it important to plan for digital assets? V. What to do and how to plan ahead? The information presented in these materials, should not be construed or relied upon as tax or legal advice or opinion. These materials are intended for general educational and informational purposes only, and readers are urged to consult with an attorney licensed to practice in their state concerning their specific situations and any specific tax or legal questions that they may have. Digital Assets

3. 3 Digital Assets – Why Are Digital Assets Important? In June 2011 – MSNBC published an estimate of what happens every 60 seconds on the Internet:  Over 168,000,000 emails are sent;  Over 695,000 Facebook status updates are written;  Over 6,600 digital photos are added to Flickr;  About 600 videos are added to YouTube; and  About 320 new Twitter accounts are created. THAT WAS IN 2011 ! WHAT IS HAPPENING NOW ?

4. 4 Why Digital Assets are Important This is part of our everyday lives. This is how our children and grandchildren interact and communicate now. What happens if you or your client become incapacitated, seriously ill or die? Could the family or fiduciary access digital assets ? Most are protected by user names and passwords. How does the family or the fiduciary find and access digital property?

5. 5 What Are Digital Assets ? Simple terms: Any electronically stored information Emails Social media accounts – Facebook, LinkedIn, Twitter, MySpace Photograph and photo and video sharing accounts – Flickr, You Tube, Vine Music – iTunes, Pandora Cloud Storage Ebay, PayPal Accounts Blogs Online Video Game Accounts Domain Names Online Financial statements E-Books

6. 6 What Are Digital Devices? Simple Terms: Any device that stores electronic information Computers Smart phones I-Pads/Tablets I-Pods and MP3 Players E-Readers Flashdrives External Hard drives

7. 7 Why Plan Ahead? Obstacles to obtaining needed information: 1. Passwords and Encryption 2. Terms of Service Agreements 3. State Laws a. All 50 states have criminal laws regarding unauthorized access to accounts - Fla. Stat. Sections 815.01-815.07 b. Only five states have laws that allow fiduciaries to deal with digital property c. Florida does not have a fiduciary digital asset statute (YET!) d. Uniform Fiduciary Access to Digital Assets law in the works - the goal is to vest fiduciaries with the authority to manage and distribute digital assets and to access digital assets. 3. Federal Laws a. Computer Fraud and Abuse Act b. Stored Communication Act

8. 8 Terms of Service Agreements (“TOSA”) Consumer must accept or decline – non-negotiable Very one sided/self serving Who has authority to access account and/or close it Privacy policies Limitations on liability and indemnification Jurisdictions if disputes arise Provider may make unilateral changes to the TOSA without notification to the user Transferability; Property Rights – Most accounts are licenses to use an internet provider’s service. In general, licenses expire at death and are not considered assets.

9. 9 Federal Laws Computer Fraud and Abuse Act (“CFAA”) 18 U.S.C. § 1030 – enacted in 1986 to criminalize internet crime. This law makes unauthorized access to any computer, any online service or account a crime.  Example – Most social media sites say it is a violation of the Terms of Service Agreement to let anyone besides the account holder access their account.  When a person “exceeds authorized access” they violate the Terms of Service Agreement and in turn violate the CFAA.

10. 10 Federal Laws Stored Communications Act (“SCA”) 18 U.S.C., § 2701 – 2712 – enacted in 1986 creates a right to privacy for data and information stored online by certain providers  Providers to the public can not be compelled to disclose  Providers to the public are prohibited from voluntarily divulging the contents unless an exception applies under § 2702 (b). If there is wrongful disclosure, there are serious penalties.  Exception – “Lawful consent” exception found in § 2702 (b) allows service provider to voluntarily disclose if there is lawful consent, but they can not be compelled to disclose  Example – Sahar Daftary Estate vs. Facebook

11. 11 Sentimental Value vs. Monetary Value Pictures, email, music – primarily sentimental value Example – In the Matter of Justin M. Ellsworth, Deceased (Michigan Case) Example – Karen Williams vs. Facebook (Oregon Case)

12. 12 Sentimental Value vs. Monetary Value Monetary Value: Example – Planet Calypso Player in Entropia Universe Sells Virtual Resort for $635,000 (Newswire November 12, 2012) Example – Recent Sales Prices of Domain Names in 2013:  IG.com - $4.7 Million  114.com -$2.1 Million  MathGames.com - $725,000  Moms.com -$252,000  Estate.com -$165,000 Note that Domain Names that are not renewed can become inactive and when inactive for 12 months can be resold without notification to the original owner

13. 13 How To Plan Ahead Inventory of all accounts, user names and passwords Electronic Inventory of all accounts, user names and passwords  Keep a master list of all accounts and passwords that only needs one password to access (i.e., LastPass, 1Password, KeePass)  Services that will store on line account info. and provide notice upon death or a way to access the list upon death or incapacity (ex. AfterSteps, AssetLock, Deathswitch, LegacyLocker) Back up regularly:  Info on computer - external hard drive, DVD, flashdrive  Facebook/Google+ – options to back up in “account settings,” program called Backupify

14. 14 How to Plan Ahead Written Authorization to family or named fiduciaries in Power of Attorney, Will or Trust (this should hopefully satisfy the “lawful consent” exception to the Stored Communications Act If you go paperless – ask for a paper statement one time per year and set up a separate Email account to serve exclusively as the portal for all “paperless” asset information

15. 15 Sample Language – Example #1 Digital Assets. My Personal Representative is hereby given the authority to access, use and take control of all digital devices that comprise a portion of my estate, including, but not limited to, desktop computers, laptop computes, tablets, peripherals, storage devices, mobile telephones, smartphones, electronic reading devices and any similar digital device. My Personal Representative is hereby given the power to access, modify, delete, control, transfer and otherwise deal with any and all digital assets that comprise a portion of my estate, including but not limited to e-mails, documents, pictures, images, audio, music, video, software, licenses, domain names and registrations, and any other digital assets or digital files, regardless of the ownership of the physical device upon which the digital asset is stored. My Personal Representative is hereby given the power to access, modify, delete, control, transfer and otherwise deal with any digital accounts that comprise a portion of my estate, including but not limited to e-mail accounts, social network accounts, financial management accounts, domain registration accounts, domain name service accounts, web hosting accounts, tax preparation service accounts, online stores, affiliate programs, and all other online accounts. The information presented in these materials, particularly the sample language provided should not be construed or relied upon as tax or legal advice or opinion. These materials are intended for general educational and informational purposes only, and readers are urged to consult with an attorney licensed to practice in their state concerning their specific situations and any specific tax or legal questions that they may have.

16. 16 More Sample Language – Example #2 In the event that at the time of my death I owned an interest in any form of electronic, digital or intangible assets (including but not limited to leaseholds, licenses, contractual rights, computing devices, data storage devices, a domain names, user accounts, email accounts, digital pictures, digital music, or any other form of electronically stored information (collectively, “Digital Assets”)), whether included in my probate estate or not, then in addition to any other powers described in this Section or provided for under applicable law, the powers granted to the Personal Representative of my estate shall include, but not be limited to, the following: (1) the power to obtain copies of any electronically stored information of mine from any person or entity that possesses, custodies, or controls that information, including but not limited to entities that may be subject to the Stored Communications Act under or similar state laws that may then be in effect; (2) power to decrypt any encrypted electronically stored information of mine or to bypass, reset, or recover any passwords or other kind of authentication or authorization necessary to gain access to access the Digital Assets;

17. 17 Example #2 continued (3) the power to waive any confidentiality that I may have had under any Terms of Service Agreement or Privacy Policy that I had previously agreed to in regards to any Digital Asset, to the extent allowable under such Terms of Service or Privacy Policy; (4) all other powers that an absolute owner of a Digital Asset would have, and any other powers appropriate to achieve the proper investment, management, and distribution of my Digital Assets, including the power to employ any consultants or agents to advise or assist the Personal Representative in exercising the powers listed above. In furtherance of such powers of personal representative, I hereby authorize, to the extent permitted by federal and state law, including the Electronic Communications Privacy Act of1986 (which includes the Stored Communications Act), as amended, the Computer Fraud and Abuse Act of 1986, as amended, any person or entity that possesses, custodies, or controls any electronically stored information of mine or that provides to me an electronic communication service or remote, computing service, whether public or private

18. 18 Example #2 continued and to divulge to the Personal Representative: (1) any electronically stored information of mine; (2) the contents of any communication that is in electronic storage by that service or that is carried or maintained on that service; and (3) any record or other information pertaining to me with respect to that service. This authorization is to be construed to be my lawful consent under the Stored Communications Act, as amended, and any other applicable federal or state data privacy law or criminal law. The terms used in this paragraph are to be construed as broadly as possible, and the term “user account” includes without limitation an established relationship between a user and a computing device or between a user and a provider of Internet or other network access, electronic communication services, or remote computing services, whether public or private.

19. 19 What To Do When Administering an Estate Reasonable steps to ascertain if the Decedent has digital assets - Secure physical devices - if these need to be searched, be careful not to run afoul of Computer Fraud and Abuse Act. - Inquire with the Decedent’s family and estate planning attorney - Search the Decedent’s name on several search engines - Search free search engines for domain names - Hire a professional search service - Analyze bank statements for deposits or transfers from Pay Pal or other on line services - Analyze credit card bills for any charges for domain names or online storage facilit ies

20. 20 What To Do When Administering an Estate (page #2) Reasonable Steps to take if there are digital assets: - Determine if the asset can be transferred by the Decedent (i.e. ownership v. license) examine the TOSA -- example: iTunes account is not transferable - Request access or copies from service providers but read the TOSA before you do this as some may shut down the account upon notification – example Hotmail and Google have access procedures whereas Yahoo will deactivate the account upon notification of death - Petition the Court for access to the asset/information if service providers will not allow. - Notify credit agencies of the death to help prevent identify theft

21. 21 What To Do When Administering an Estate (page #3) - Discuss social media accounts with family and/or beneficiaries. If none wish to access, the fiduciary should notify the sites of death. - Protect any copyrighted digital assets - Renew domain name(s) and update notification information

22. 22 Good Sources of Information James D. Lamm’s January 2013 presentation at ACTEC meeting  Email – James.Lamm@gpmlaw.comJames.Lamm@gpmlaw.com  Digital Audit Template – http://www.digitalpassing.com/digitalaudit.pdf http://www.digitalpassing.com/digitalaudit.pdf Susan Porter’s Article in the Practical Lawyer, August 2013 edition, “Digital Estates: Handling Digital Assets in the Real World”  Sample Language to Include  Digital Checklist for Clients and Attorneys Things to Do in Cyberspace Before You’re Dead and After - Gregg M. Simon & Fredrick B. Weber - 55 th Annual Estate Planning Short Course, Illinois Institute for Continuing Legal Education An Executor’s Duty Toward Digital Assets – The Practical Lawyer, October 2013 by Kendal Dobra

23. 23 Reminder Always be mindful of The Computer Fraud and Abuse Act – Even with the Decedent’s authorization, accessing digital assets and/or digital information through the use of existing passwords could potentially violate the CFAA. Interpretation and the application of the CFAA varies but when advising your clients you must be careful. It is possible that a personal representative or executor could face criminal liability under the CFAA by using the Decedent’s passwords or by accessing the Decedent’s computer files. The Uniform Law Commission is currently drafting a Uniform Fiduciary Access to Digital Assets Act which would give fiduciaries authorized access under the CFAA and the Stored Communications Act