What Are Digital Asset Protection Trusts?

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What Are Digital Asset Protection Trusts?

Digital Asset Protection Trusts (DAP Trusts) are trusts which allow the trust creator to place existing digital rights and property into a trust for the trust beneficiaries to use.

Digital asset protection trusts are a new type of trust pioneered by lawyers in an effort to protect digital rights which are not currently protected by any laws. Although wills were initially used to give decedents control over their digital estate, that approach quickly ran into problems.

What Is a Digital Estate?

A digital estate consists of the decedent’s digital rights and property, including e-mail, text messages, online storage, websites, financial accounts, music/publishing rights, and social networking accounts. One of the biggest legal questions in the 21st century is how to manage digital rights and property after the user has passed away.

Why Shouldn’t I Use a Will To Control My Digital Estate?

The most significant issue with using wills to manage digital estates is that the decedent doesn’t always have exclusive ownership over the property. For example, a Facebook profile is created by the user, but Facebook maintains control over the profile. Estate law prohibits decedents from giving away property they do not own.

Although it is a possible to give login information and passwords to another person through a will, online companies frequently prohibit password sharing in their user agreements. Breach of user agreements can result in legal problems for the estate.

Why Would a DAP Trust Protect Digital Rights?

Many tech companies view their websites or social networking accounts as licensing property. Most licenses expire when the licensee dies. DAP trusts can protect digital estates because the trust creator can put the licenses themselves into the trust.

Like all trusts, trustees can manage the digital licenses on behalf of the trust beneficiaries. Trust beneficiaries cannot directly control the licenses, but they can still reap the financial benefits.

Are DAP Trusts Online?

Generally, yes. Attorneys working with DAP trusts keep track of the digital estate through websites that clients can access. These websites and the documents they protect are given as much computer protection as possible.

Can I Update My DAP Trust?

Yes. DAP trusts can be revocable trusts, so they can be modified by the trust creator while the trust creator is still alive. This allows the trust creator to change passwords, update addresses, or anything else the trust creator would like to do with the digital property even though the digital property is in the trust. Best of all, the trust creator can do this from his or her laptop at home.

Are DAP Trusts Recognized By Courts?

Digital Estate Planning is new, so there is very little case law in this field. As a result, cases involving DAP trusts are non-existent so far. However, the fact that tech companies haven’t challenged the legality of these trusts yet means that DAP trusts have a promising future.

Do I Need an Attorney To Create a DAP Trust?

Given that DAP trusts are a new kind of trust created to address a new field of law, it would be foolish to create a DAP trust without an attorney. Although trusts have been in existence for decades, the use of trusts to protect digital estates is a new process that requires significant legal experience.

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Last Modified: 01-10-2014 03:17 PM PST

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