Delaware Enacts New Model Law to Aid Access to Digital Assets
Gov. Jack Markell’s August 12 signing of the “Fiduciary Access to Digital Assets Act” made Delaware the first state to adopt a comprehensive law giving fiduciaries, including estate representatives, improved access to a decedent’s digital accounts and assets. The new law saw final passage in the Delaware legislature on June 30, clearing the senate unanimously and the lower chamber with only a single dissenter. It will take effect at the start of 2015.
Delaware becomes the first state to adopt a new model state act, the Uniform Fiduciary Access to Digital Assets Act, approved earlier this summer by the Uniform Law Commission, a non-partisan advisory group which has written many other model state laws, including the Uniform Probate Act and the Uniform Commercial Code.
Backers of the model state law and its Delaware counterpart argue the powers available to estate executors have failed to keep pace with the growing volume and importance of online assets. While access is quick to a decedent’s paper documents, the same is often not true for material stored digitally in a decedent’s online accounts.
Some internet service provider (ISP) licensing agreements deny access to a decendent’s account; one well-publicized case involved a refusal by Yahoo! to provide the family of a soldier killed in Iraq with the password to his e-mail account, forcing the family to get a court order allowing access. Some ISPs claim allowing such access might run afoul of state or federal privacy laws or criminal laws forbidding “unauthorized access” to online information.
Seven states had already adopted laws dealing with at least part of this issue, although not as broadly as the model law or Delaware’s recent enactment. Those states set tighter restrictions on the type of accounts and assets covered, or the types of fiduciaries eligible (besides estate executors, the model bill and the new Delaware law also apply to conservators, trustees and agents holding durable power of attorney authorizations). A limited bill was introduced in the Pennsylvania legislature in 2012, but saw no action.
Delaware’s new law provides a personal representative’s with the same authority over digital assets or accounts as the deceased account holder formerly had, and makes the fiduciary an authorized user under ISP end-user license agreements, unless the personal representative’s access has been limited by the decedent or a court.
Digital accounts and assets may not be an issue for some, but there’s little doubt that the cloud and online storage are replacing filing cabinets. In May of this year, the security software firm McAfee released a global survey of how consumers value their digital files (such as personal accounts and records, downloads, and memory-laden photos and videos). Users’ estimates averaged $35,000.
A planning tip: When devising or updating an estate plan, think about digital items you own, how you want them handled, and what your family or executor might need to know to access them if you die or become incapacitated. Then prepare an inventory, keep it in a secure place, and inform a trusted family member or advisor where it can be found.