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March 16, 2017

Fiduciary Assets to Digital Assets

Vector social media icons. Pinterest and Instagram, Flickr and Whatsapp, Skype and LinkedIn

By: Kristy Bayus, Esquire

I don’t need to tell you that social media has become a mainstream way to communicate ideas, photos, and information. Even the President uses this technology as a prime form of expression. Have you considered what happens to this digital information after your death? Without specifically granting your fiduciaries access to edit or delete the personal data through provisions in your estate planning documents, it could be accessible in cyberspace indefinitely. It is important, therefore, to review your estate planning documents to make certain that this information is protected in the event of your death or disability.

Assuming a veil of anonymity, one may divulge personal information in a comment, tweet, or private message, without a second thought. We pay bills online, we hold information for our bank accounts online, and we file our taxes online. What happens to these digital media accounts if the user dies or becomes disabled? Who can access or delete that information?

New laws have been enacted across the country to address the issue of access to digital assets by fiduciaries. These laws are in their formative stages and have not had the benefit of being tried and tested in court as of yet. Nevertheless, they could affect us all.
Agents under powers of attorney, personal representatives (executors) of estates, guardians (of the disabled or of minors), and trustees are all examples of “fiduciaries.” Fiduciaries have a legal duty to protect the assets of the principal or estate that they serve, but it is often not an easy task. Even if the fiduciaries are aware of a user’s account credentials, their access is limited by the custodian’s Terms of Service, which may prohibit another individual from accessing the user’s account, deeming it a cyber-crime. How, then, can the fiduciary perform his or her legal duties in the digital age?

In the case of a deceased “user,” recent laws across the country provide for the disclosure of the “catalogue of electronic communications sent or received by the user” and the “digital assets of the user” upon receipt of a written request for disclosure, a death certificate, and a Letter of Administration (proving that you are the personal representative).

However, the these laws also provide that the custodian of the information (such as Facebook, Twitter, and Instagram) may require an affidavit stating that the disclosure of the user’s digital assets is reasonably necessary for the administration of the estate, or a finding by the court that such disclosure is reasonably necessary for the administration of the estate.

Does wanting to terminate a deceased spouse’s Facebook account and all of the personal information therewith qualify as “reasonably necessary for the administration of the estate?” It could be argued that access to the account will prevent identity theft or be used to marshal assets of the decedent, both duties of the personal representative. Since this Act was only enacted in October 2016, it has yet to be seen how a court might rule.

Likewise, agents under valid powers of attorney and trustees are bound by the same requirements if, for example, they are acting on your behalf if you would become disabled. What happens if you provide all of these items and a court denies that it is reasonably necessary for the fiduciary to have access to the digital assets? Can you authorize fiduciaries’ access to digital assets during your lifetime?

The answer is yes. In fact, the best practice is to have your attorney include detailed instructions in your estate plan to provide or restrict access by a fiduciary to online accounts. This includes granting legal authority under your Will, trust, and power of attorney.

The Uniform Fiduciary Access to Digital Assets Act, enacted by several states, provides that fiduciaries may manage web domains and virtual currency, but unless the user has explicitly consented to the fiduciary’s access to E-mail, text messages, and social media accounts in a Will, trust, or power of attorney, the fiduciary may not have access to these forms of digital assets.

Depending on the digital asset accessibility laws (if any) enacted in your state, the requirements may be slightly different, but your estate plan should define “digital assets” and the authority or restrictions that you wish to give the fiduciary regarding the content of any electronic communications, any catalogue of electronic communications sent or received by you, and any other digital asset in which you have a right or interest.

That being said, I advise you to schedule an appointment with an estate planning attorney to assure that your Will, trust, and/or power of attorney have the requisite language (explained below) to protect your digital property and personal information in the event of your death or disability.

About the Author:
Kristy Bayus is an Associate in PK Law’s Wealth Preservation Department. She focuses her practice on drafting estate planning documents, administrating probate estates, and counseling in the areas of estate taxes, asset protection, and elder law. Kristy can be reached at 410-339-6774 or kbayus@pklaw.com.