Wednesday, August 20, 2014

453779831 (1)In our previous posts, Estate Planning for Digital Assets and Bitcoins and other Hidden Assets, we discussed how to protect online assets with a digital estate plan.  Administering an estate with digital assets such as e-mail, online accounts, social media accounts, and online photo albums is an ever-growing issue among estate planners. As the digital age continues to grow, a client’s online presence has become another asset of value, but how such assets pass remains elusive to many. Although digital assets are a form of personal property, ownership rights and privacy controls are governed by a myriad of federal laws, state laws, privacy laws, copyright laws and intellectual property laws.

However, on July 16, 2014, the Uniform Law Commission, whose members are appointed by state governments to help standardize laws, approved the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”), a draft of which can be found here.  The primary purpose of the UFADAA is to empower fiduciaries, guardians and agents with the power to “access, manage, distribute, copy, or delete digital assets and accounts,” according to the National Conference of Commissioners on Uniform State Laws.

The Act allows fiduciaries, guardians and agents to gain access to, but not control of, the principal’s email and other online digital assets, so long as such access is not prohibited via a Last Will and Testament. The law would supersede the rules outlined by an online company’s terms and service agreements, but the fiduciary or agent still would have to abide by other laws such as copyright and intellectual property laws.  For example, “a widow could read her deceased husband’s emails but couldn’t send emails from that account. And a person could access music or video downloads but not copy the files if doing so violated licensing agreements.” 1

The only significant concern is the amount of time it takes the Uniform Law Commission to agree to enacting “model” or “uniform” legislation. Then, it is up to the individual states to decide whether to adopt such a law. It could take years for any type of law to be enacted and enforced in each individual state, and in the meantime unsettled issues about conflicting federal and state law will remain. As we stated in our previous post, to avoid losing access to digital assets upon death or incapacity, a person should develop a digital asset estate plan, establish an inventory of his or her existing digital assets (including hardware, software and online accounts) and provide a means by which the agents or fiduciaries he or she designates in his or her estate planning documents can access the inventoried assets.

1/See What Happens To your Online Accounts When You Die?, by Anne Flaherty.

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