Digital Assets: A Wealth of Uncertainty?
Many Americans have detailed instructions addressing the dissolution of their assets after they pass away. However, many people are facing a new challenge: what happens to their digital assets? What happens to their pictures, email accounts, banking and brokerage accounts, and social networking profiles? In our increasingly digital world, financial advisors and estate planning attorneys now recommend four steps to properly manage one’s digital assets: 1) identify and inventory all digital assets, 2) appoint a trustee for those assets, 3) provide access, such as passwords, to that trustee, and 4) provide instructions for distributing those assets.
Further, the Uniform Law Commission (ULC) has recently passed the Uniform Fiduciary Access to Digital Assets Act (UFADAA), which provides comprehensive provisions governing access to digital assets. The underlying goal of UFADAA is to give fiduciaries the tools they need to carry out the wishes of the deceased. In a press release, the ULC stated the UFADAA “solves the problem using the concept of ‘media neutrality.’ If a fiduciary would have access to a tangible asset, that fiduciary will also have access to a similar type of digital asset.” The UFADAA applies to 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; and trustees.” The UFADAA “defers to an account holder’s privacy choices as expressed in a document (such as a will or trust), or online by an affirmative act separate from the general terms-of-service agreement. Therefore, an account holder’s desire to keep certain assets private will be honored under UFADAA.” The ULC approved UFADAA at its 123rd annual meeting this past July in Seattle.
The ULC’s model legislation uses the concept of media neutrality to address the problem of providing access to a decedent’s Facebook and Google accounts. Currently, most providers’ terms-of-service agreements state that the user alone can access the account’s information. This poses a problem when that user is deceased. Facebook, for example, currently requires that a family member make a formal request to gain access, a request that is not always granted. Parents of deceased children have been frustrated by Facebook’s policies. In contrast, companies such as Japan’s Yahoo Ending allow users to choose how their accounts are handled after they pass away.
While it is unclear how many states will eventually adopt the UFADAA, one thing is clear: as more and more of our lives are seamlessly integrated with digital material, those assets will have to be dealt with.