Dividing Assets in the Digital Age

Dividing Assets in the Digital Age

Digital assets continue to confound many people as they seek a divorce. Unfortunately, these assets are intricately linked to many people’s lives, containing photos, diaries, financial information, business contacts, and other sensitive information. Finally, people take these assets for granted and do not even consider how they might be treated during a divorce.

What are digital assets?

Digital assets cover a variety of assets including:

  • Social media accounts, including, blogs, photo-sharing websites, and traditional social media accounts;
  • Accounts that denote “ownership” over an asset such as iTunes, Kindle, and Amazon;
  • Income-generating assets such as an Amazon business account, eBay storefronts; and
  • A series of miscellaneous assets such as Dropbox, email accounts, digital photos, artwork, bitcoins, domain names, and other assets.

The issue, who owns the assets?

The biggest problem that people in divorces confront is who owns the digital asset? Every digital is governed by its terms of use. The terms of use are the contract between the original user who opened the account and the company providing the service. The terms of use determine who owns or is licensed to use what.

For example, in most situations, people are not granted “ownership” but rather a license to use and access the information. For example, the iTunes terms of use provide that content is rented for end user use only. Similarly, Kindle provides that content is “licensed, not sold … by the Content Provider.”

Since most of these assets are governed by similar “terms of use” distributing them upon divorce isn’t as simple as splitting cash or access to a vacation home. Specifically, many of these terms of use agreements prohibit the transfer of accounts away from the end-user. Therefore, transferring assets violates the use agreements.

The alternative is that one spouse is given cash or other property as compensation for the loss of the digital assets. However, an alternative property is not a viable solution for digital assets that hold items of intrinsic value, like photos.

Another solution is to share passwords and account access information. But, there are substantial logistical issues. For example, it requires ex-spouses to remain in communication to coordinate access. Furthermore, digital security often requires “two-step” authentication which limits access to these accounts from “unknown” computers. Two-step verification sends a text or email with a code that the user must input to access the account.

Each solution is imperfect therefore planning is crucial to mitigate these issues.

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