Stephen S. Wu-- SL: Legal Writer,, (408) 573-5737, 50 W. San Fernando St., Ste. 750, San Jose, CA 95113

Transitioning User Accounts Under User Estate Plans

Last April, I wrote a post about how users of online services, including virtual worlds, can plan for their own death or disability through appropriate estate planning mechanisms. The flip side of users planning for the continuity (or deletion) of their accounts holding their online assets is service providers planning for users’ death or disability. Service providers may receive inquiries from relatives of users that have died or become disabled. They may also receive inquiries from agents and representatives purporting to act on behalf of disabled or deceased users. How should service providers plan for users’ death or disability?
Oklahoma enacted the first statute within the U.S. to address the issue. Okla. Stat. tit. 58, § 269. The statute provides, “The executor or administrator of an estate shall have the power, where otherwise authorized, to take control of, conduct, continue, or terminate any accounts of a deceased person on any social networking website, any microblogging or short message service website or any e-mail service websites.” The Oklahoma statute, however, is limited to accounts on social networking sites (like Facebook), microblogging sites (like Twitter), and email service sites (like Gmail, Yahoo, or Hotmail). The statute does not reach stored value accounts (like PayPal), cloud storage services (like Dropbox), or non-website Internet applications in which online assets can be stored (like virtual worlds or MMOGs).

On the face of it, service providers will need to allow a personal representative to take control of user accounts in response to this statute. Nervous service providers, however, could take the position that some other legal regime, such as privacy laws or general consumer protection laws that arguably protect the right of privacy may not “otherwise authorize[]” the relinquishment of control over user accounts. For these service providers or service providers holding the accounts of users in other states, the service providers may want to require a court order from the personal representative confirming his or her control over a user account before turning over control. A personal representative may be able to obtain such an order fairly easily, although seeking such an order may involve additional expense to the estate.

Nonetheless, it is possible for service providers to create policies for personal representatives and agents to take control of accounts and make their privacy policies subject to the change of control policy for deceased and disabled users. For instance, service providers could create provisions in their terms of service permitting an agent acting under a durable power of attorney,successor trustee, conservator, or guardian to take control of the account of a disabled user. The policy would need to include provisions to confirm the authority of the agent.

Service providers can also plan for the death of users by having terms of service that allow an executor, administrator, or successor trustee to take control of an account following the user’s death. The policy would need to include confirmation of the representative’s authority, such as by inspecting the court documents granting the representative authority over the user’s estate. As an alternative, however, the service provider can create a mechanism by which the user designates a “beneficiary” who is entitled to control the user’s account upon death. Upon the showing of a death certificate and other appropriate authentication measures, the service provider can transfer control of the account to the designated beneficiary. Transfers through contract like this can effect a nonprobate transfer of the account and bypass the more complicated process of transferring the account through the deceased user’s estate.

Creating a “beneficiary” designation mechanism, however, creates additional work for the service provider upfront. Nonetheless, it may save the service provider time over the long run when administering a post-death account transfer. Therefore, service providers will need to weigh the pros and cons of creating a beneficiary designation mechanism.

Right now, the vast majority of service providers have no mechanisms to handle user death or disability. The attorneys who write terms of service and privacy policies for online service providers, including virtual worlds and video game providers, tend not to be lawyers familiar with estate planning and administration mechanisms. As older people start using online accounts, and as the user population ages, however, service providers will more frequently run into situations where they will need to deal with user death or disability. Planning now may save time and expense later. Accordingly, I recommend that service providers review their policies and create transfer mechanisms to account for user death or disability.