Estate Planning for Digital Assets
Law is a slow moving animal. More often than not, changes to laws or adoption of new laws are not so much of a function of foreseeing future issues for which they may be applicable, as they are reactionary- adopted in light of societal changes that require modifications to the formal constructs of society in order to keep up with an ever-changing world.
Perhaps no issue in the field of estate planning and asset management better illustrates that reality better than that of digital asset planning, management and access.
Digital Assets
Very generally speaking, digital assets are those which exist in a solely intangible and electronic realm. Everything from images uploaded to your Instagram account to online banking records can be considered digital assets. With the technological advances of the last twenty years we have become interconnected with a sort of virtual persona of ourselves- one built upon years of Facebook posts and shares, tweets, Linked In resumes, Drop Box documents and electronic bank records that contain our important personal and financial data, and Instagram images reflecting glimpses into our very real and tangible lives.
Dealing With Digital Assets After Death
Those digital assets, while seemingly interconnected with our daily lives pose a problem for those that are tasked with settling our affairs when we pass away. That’s because privacy concerns and archaic laws adopted prior to the growth of the internet (not to mention the invention of texting, instant messaging, social media and the like) scantly address rights of individuals to access intangible data that does not personally belong to them.
Prior to ~1990 intangible assets were few and far between. That was certainly true for an average person. Bank records were on paper, photos needed to be physically developed on film, actual phone calls were made in lieu of emailing or texting. State laws for executors (individuals appointed in a will) and other personal representatives clearly permitted a court to grant access to an individual to access those types of hard-copy records as he or she carried out the task of administering the estate of a decedent. Armed with letters of office (or other similar official forms) an executor could approach a third party, show their authority for collecting a decedent’s documents and walk out the door with what they needed.
Legal Challenges
Of course, those laws are still a very useful tool for estate administrators, but many of them fail to address the ability of the executor to access digital assets with the same authority. That fact coupled with laws like the federal Stored Communications Act, which contains prohibitions for the disclosure of electronic communications to anyone not the owner of such communications creates a complex web of restrictions on data disclosure that poses a challenge to loved ones trying to access and delete a decedent’s online persona.
Thankfully, state legislatures are aware of the issue and are seeking solutions to make estate administration more efficient in the modern digital era. In Illinois, for example, the legislature is currently debating a bill which would make the Uniform Fiduciary Access to Digital Assets Act(UFADAA) law. The UFADAA would grant fiduciaries, including estate executors and other agents, authority to access a decedent’s digital assets. Of course, it remains to be seen how the new law would intersect with federal laws prohibiting disclosures, like the SCA, but it nevertheless is a substantial step in the right direction.
Potential Estate Planning Solutions
Currently, estate planning attorneys are hard-pressed to find failsafe solutions to address the issue. One potential solution is to include specific language and authorization for a personal representative or trustee to access and management digital assets in a will or trust agreement. For example, a trustee may be expressly granted authority to, “obtain full and complete access and control over the content of all digital assets, data, domain names, on-line storage accounts, web pages, email accounts and software programs owned or in which (a decedent) has an interest as licensee at the time of (the decedent’s) death (“Digital Property”). Without limiting the generality of the foregoing, the executor/trustee shall have full and unrestricted rights and access to all Digital Property notwithstanding the possible lack of log-in information, i.e. user names and passwords. No person or entity need inquire beyond the terms of this instrument in transferring Digital Property to the (executor or trustee).”
The effectiveness of such a clause is not guaranteed, since third parties, like Facebook or Drop Box, may refuse to make a disclosure, hesitant to go against the language of the SCA, but it at least provides the executor or trustee with an additional weapon in his or her administration arsenal.
No doubt will laws eventually catch up with the current state of the digital lives we live and more closely reflect a reasonable balance between protecting our data and enabling a trusted fiduciary to manage that data when we are unable to do so. But, given the snail’s-pace at which the issue is currently evolving, there’s no guarantee that a solution- when it does come, won’t already be outdated, yet again surpassed by future technological advances.
Michael F. Brennan runs a virtual law office helping clients in Illinois, Wisconsin, and Minnesota with estate planning and business issues. He can be reached at michael.brennan@mfblegal.com with questions or comments, or check out his website at www.thevirtualattorney.com.
The information contained herein is intended for informational purposes only and is not legal advice, nor is it intended to create an attorney-client relationship. For specific legal advice regarding a specific legal issue please contact me or another attorney for assistance.
