Traditionally, people think of their assets as their homes, furniture, personal possessions, cars, bank accounts, retirement accounts, and maybe even pets. When someone dies or becomes incapacitated, estate planning laws have been available for Personal Representatives, Trustees, Attorneys-in-Fact, and other fiduciaries to access one’s assets and administer them properly. However, the advent of the internet and the digital age in the last 25 years has presented new problems with unclear answers for Digital Assets.
Digital assets present themselves in a variety of forms. They can be log-in information for online accounts, emails, digital account numbers, photographs, videos, emails, and documents. There are even your “likes” on Facebook, Tweets, Instagram content, and internet “cookie” data. Such assets can also include digital media, such as e-books, movies and music from Apple, Amazon, Google and others. In recent years, digital currency, including bitcoin and other electronic “cryptocurrencies,” have emerged. In some cases, the underlying information itself is not as important as the fiduciary’s access to such information so that the fiduciary can perform his or her job to wind up the estate.
As a practical matter one’s access to digital assets has been governed by the account provider’s end-user license agreement or terms and conditions. Most people click “I agree” without reading the fine print. The agreements generally define the ownership rights over the “assets” created by the user’s account interaction. There are usually limitations as to who can access the account and its underlying information.
While the account user has access, the agreements often state that access terminates at the user’s death and this access in non-transferable. Account providers have been concerned with violating federal privacy laws such as the Stored Communications Act and the Computer Fraud and Abuse Act if they allow another person to access a user’s account information.
In 2014 the Uniform Law Commission completed a draft of the Uniform Fiduciary Access to Digital Access Act, and then revised it in 2015. The Revised UFADAA attempts to strike a balance between a fiduciary’s need to access protected digital information and an online service provider’s obligation to protect the privacy of a decedent-customer. The Revised UFADAA has been endorsed by the National Association of Elder Law Attorneys, Facebook, and Google.
The Revised UFADAA affords a fiduciary the power to manage digital assets as it would tangible assets. A “fiduciary” is defined as “an original, additional, or successor personal representative, [conservator], agent, or trustee”. Family members of a decedent may not unilaterally claim this power to access digital assets (unless, of course, they have been appointed as a fiduciary).
Currently, about 22 states have enacted a version of this law. Unfortunately, Massachusetts has not yet enacted a version of the UFADAA. There is a bill that was introduced in the Massachusetts legislature over two years ago, but it still has not progressed past the committee stage. Because a number of states have already enacted a version of this law, the expectation is that Massachusetts along with most other states will enact a version of this law in the future.
In the meantime, people might wonder how they can deal with their digital assets if they live in state without a version of the UFADAA.
One option, which many estate planning attorneys have already done, including our firm’s attorneys, is to add language to wills, trusts, durable powers of attorney, and other estate planning documents which speaks to a fiduciary’s power to deal with an individual’s digital assets. While this language may not currently be honored by account providers until a version of the UFADAA is enacted in every state, individuals would not have to worry about updating their documents in the future when the law will probably be widely adopted. If this law is adopted in a majority of states, the account providers will probably update their terms of service and license agreements to reflect the terms of the new law, thereby allowing fiduciary access.
Another option which some people do is make a list of every online account they have along with the respective login information. This can be done the old fashioned way with pen and paper. A more modern way is to use encrypted password managers. Now there are password managers with the ability to name fiduciaries to gain access upon one’s death or incapacity. However, giving passwords to others, including fiduciaries and other agents, may present its own set of problems under current laws.
An estate planning attorney who is well-versed in planning for digital assets can walk you through the available options along with each option’s pros and cons. Only then can a plan be developed to best suit your and your family’s particular needs.
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