August 24, 2012
Can Grandma Bequest Her iTunes and Grandpa His Kindle Books?
The answer to the question here is probably yes, but the process would be more difficult than if the person was bequesting his or her paper copy books or CDs. The reason for this is that when a person purchases digital content, unlike its hard copy counterpart, it only receives a license to use the digital material. A person who makes a purchase on his or her iTunes account does not actually own the music that he or she has purchased. In addition, most standard terms of agreement state that a person owns a "nontransferable" right to use the music or audio files that the person has downloaded. This is what gives companies like Apple the ability to restrict which devices can play their digital files.
Others disagree with this classification and would like to change the status of digital files. Some argue that these files are definitely assets and should be treated as such. Even with this status, a person could still use one type of estate planning technique to pass there digital library to someone of his or her choosing. For example, David Goldman at the Apple Law Firm in Jacksonville, Florida has begun using trusts to hold digital assets. The trust is structured to allow the beneficiaries of the trust to use the settlor's music even after the settlor dies. Goldman has begun selling software that acts like an online safe-deposit box but has software built into it that creates a legal trust for a client's account. In truth though, the situation clearly shows that intellectual property law needs to be updated to take into account that technology and how we purchase intellectual property is changing.
See Quentin Fottrell, Who Inherits Your iTunes Library?, Wall Street Journal, Aug. 23, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) and David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.
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