Every year, Americans are more likely to send email messages, bank online, archive family photos and participate in social media. Many people even decide to “go paperless,” paying bills and accessing all account information online. It’s a sign of the times, so states are passing legislation to grant family members, executors and other fiduciaries the right to access a decedent’s “digital assets,” including email, social media, photos and financial accounts that are contained on personal computer files and cloud networks.
It is no surprise that access to a deceased person’s digital assets can be a touchy subject, because individuals have privacy rights, too.
For example, maybe a grandmother doesn’t want her family to read personal emails she sent to an old flame after her husband’s death ten years earlier. Perhaps she doesn’t want her squabbling adult children to read confidential emails they sent her, bashing one another. It’s also possible that she doesn’t want her children and grandchildren to access her medical records.
Digital Assets Aren’t Like Other Assets
Digital assets don’t disappear when a person dies. They sit in cyberspace or are locked inside a computer unless a spouse, executor or some other fiduciary receives the passwords and authorization to access them. Digital assets also continue to pose cyber-security risks. For example, hackers could gain access to the records — and heirs, executors and other fiduciaries might lack the ability to change passwords.
Digital assets face obstacles that don’t apply to traditional types of property, including passwords and encryption. In addition, unsuspecting executors and family members who access digital assets may inadvertently trip criminal laws regarding unauthorized access to computers, such as the Computer Fraud and Abuse Act, or data privacy laws, such as the Stored Communications Act.
States Join the Digital-Asset Bandwagon
Courts are just beginning to see disputes over digital assets. So far, no decisive rulings have determined who owns a deceased person’s “digital access” and who gets to see digital records. To complicate matters, there’s little uniformity in current state laws.
Currently, at least eight states — Connecticut, Idaho, Indiana, Louisiana, Nevada, Oklahoma, Rhode Island and Virginia — have enacted laws that grant executors and other fiduciaries access to a dead person’s digital information. Executors or trustees are generally given the same control over those assets as they have with physical assets, such as safety deposit boxes and stock certificates.
Delaware may soon be the next state to move into this cyber zone if its governor signs pending legislation that would make digital assets part of a person’s estate upon death. At least ten other states are expected to consider similar legislation this year.
Call for Nationwide Protection
To head off confusion and help establish a nationwide standard, the Uniform Law Commission (ULC) recently passed a model digital-assets law called the Uniform Fiduciary Access to Digital Assets Act (UFADAA) for states to follow. The ULC is a non-profit organization of lawyers, legislators and judges appointed by every state to draft and standardize laws.
“In the modern world, digital assets have largely replaced tangible ones,” the ULC says. “Documents are stored in electronic files rather than in file cabinets. Photographs are uploaded to websites rather than printed on paper. However, the laws governing fiduciary access to these digital assets are in need of an update.”
The question of what to do about a deceased person’s digital assets is a topic highly debated in the world of cyberspace and emerging law. The UFADAA attempts to solve the problem. Essentially, if a fiduciary would have access to a tangible asset, that fiduciary will also have access to a similar type of digital asset under the UFADAA.
The UFADAA governs four common types of fiduciaries:
- Personal representatives of a deceased person’s estate
- Guardians or conservators of a protected person’s estate
- Agents under a power of attorney
The purpose of the UFADAA is to give these fiduciaries the authority to access, control or copy digital assets, while respecting the privacy and intent of the account holder. Sometimes fiduciaries might need to access digital assets while an account holder is still alive but otherwise incapacitated.
A Little Forethought Can Prevent Big Problems
You should start thinking now about who should have access to your digital assets, including passwords and personal identification numbers, when you die. There are plenty of questions about access and how to get it.
For instance, where are passwords located? Are digital assets hidden in the cloud, an offsite repository that houses a person’s online files?
If your estate plan doesn’t address this issue at all, contact your estate planning advisor for the most prudent strategy in your state. If you move, your life situation changes or your state passes new digital asset legislation, you may want to revisit your existing estate plan to ensure your digital assets continue to be properly transferred and protected.