As an increasing amount of our information and assets is stored online or in cloud-based services, access to such content is at the forefront of succession and estate planning. While service providers encourage us to store our family pictures, music collections and stock certificates electronically, access to those items for our loved ones becomes more difficult. Yes, kids, people once flipped through photo albums, listened to music on vinyl and CDs and kept physical stock certificates to represent ownership in a company.
While the relationship between digital assets and estate planning continues to evolve, we have received some guidance with the passing of the Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”), currently law in 19 states, including Illinois as of August 12, 2016.
The Act defines the parties involved in gaining and granting access to digital assets and electronic communications as follows:
- the original owner is the “user”;
- the individual seeking access is either (a) the “agent” (under a power of attorney), (b) the “personal representative” or “guardian” (of an estate) or (c) a trustee (under a trust);
- a person who is granted access by the user is the “designated recipient”; and
- the service provider or holder of the digital assets or electronic communications is the “custodian.”
It is important to remember that each custodian may have its own terms or process for dealing with digital assets and electronic communications.
Privacy and Access
A “digital asset” is vaguely defined as an electronic record in which an individual has a right or interest. This could include just about any account that you log into. The definition specifically excludes an underlying asset or liability unless the asset or liability is itself an electronic record.
The Act allows the custodian discretion over whether to grant the fiduciary partial or complete access over digital assets. An agent acting under a power of attorney must provide an original or copy of the power of attorney document as well as other materials that the custodian may request. An executor or personal representative of an estate or a trustee must provide a certified copy of the relevant document. The custodian is also granted discretion over which other materials it may require prior to granting the requested access.
Meanwhile, “electronic communication,” as defined in the Act, appears to include e-mails and voicemails but specifically excludes “any communication from a tracking device or electronic funds transfer information.” The Act also excludes employers in regards to the electronic communications of an employee in the ordinary course of the employer’s business.
Distinguishing between digital assets and electronic communications is important because one simple approach for a user may be to grant his or her designated recipient access to digital assets but not electronic communications. This would allow access to items of financial or sentimental value, such as pictures, frequent flyer miles, creative works and other digital assets in which the user had a vested interest.
On the other hand, it is understandable that an individual may not want to grant access to his or her e-mails, voicemails or online messages to anyone, even the spouse or estate administrator. Unless there is a dispute in which a court permitted the consideration of outside evidence, these items should have no impact on the administration of an estate and in most cases would be of no use to the family.
The Online Tool
Similar to a beneficiary designation, an “online tool” offered by a custodian will supersede the direction in a will, trust or power of attorney. Facebook was at the forefront of utilizing an online tool to manage a deceased user’s account. It’s safe to assume that Facebook frequently received requests from family members or friends to access a deceased user’s account to post the news of his or her death and notify friends of memorial services. However, as the custodian of the user’s activity, relationships, pictures and private messages, Facebook is in a precarious position.
To address this issue, Facebook allows you, the user, to designate a “Legacy Contact” who, after your death, can post on your behalf (but not as you). The Legacy Contact is prohibited from accessing the custodian’s private messages. In terms of practical application, this feature would be helpful to notify Facebook friends of a death or memorial service. Alternatively, you can opt to have your account permanently deleted upon your death if you do not want to allow limited access to a Legacy Contact.
How to Plan for Your Digital Assets
One of the more important digital assets for individuals is usually pictures stored in an online account. The easiest way to make sure that these are preserved is by sharing access through the custodian itself. If you prefer to only grant access in case of your death, then this is something that should be addressed in your trust. Additionally, items like digital artwork or other creative works may be addressed specifically in a power of attorney or trust, if applicable.
For the most part, the new law protects custodians to a greater extent than it empowers principals, agents or administrators. We will have to wait and see how the application of the new law affects estate administration. Since every custodian will not immediately offer an online tool to designate your wishes for access, an individual’s wishes must be addressed on a case-by-case basis.
If allowing or prohibiting your family or agent to access your digital content, whether in a broad sense or for specific items or accounts, is important to you, the Act provides guidelines on how this goal can be achieved. In addition to checking whether the services you use have an online tool that allows you to grant access or have your account deleted, your wishes can now be addressed more broadly in your estate planning documents.