Author: David

Preparing for the Oncoming RUFADAA Tsunami on Estate & Elder Law

David

As of this writing, 31 states in the union have either enacted or will be enacting legislation based on the Revised Uniform Fiduciary Access to Digital Assets Act of 2015 (RUFADAA[1]). The new legislation affects both regular folks, the end users (the “User”); and online providers alike. RUFADAA focuses directly on “Digital Assets,” meaning those assets not directly managed by typical fiduciary means such a Payable/Transfer on Death scenario. These assets include a myriad of items, from e-mails to information like documents, apps, music and multimedia, and financial data stored in the cloud or even on a local phone or computer. Unless and until the consequences of not handling such data is discussed during a planning session, few clients will comprehend the depth of the situation.

Once it is discussed, clients will recognize that this information, potentially valued in the thousands of dollars, let alone priceless sentimental value, will be unrecoverable upon incapacity or death of the User. Estate planners must recognize that absent the User’s designation via an “online tool,” as designated in the RUFADAA, it falls to the User’s Powers of Attorney, Last Will, Trust, or Letters of Guardianship to determine who will have the authority to access their Digital Assets and to what extent that access is permitted. The last resort will be an online provider’s (“Custodians”) End User License Agreements (EULA) which may not be so kind to the User.

A further challenge regarding the practicality of dealing with the Digital Assets is that each Custodian will have differing mechanisms for the incapacitated or deceased User’s representatives (the “Fiduciary”) to actually effect access or termination of the Digital Assets. During a time of strife, either in dealing with an identity theft or death, the Fiduciary will lack the time and willingness to deal with each individual Custodian on the Custodian’s terms, even if a Custodian’s online tool was utilized by the User. Only one service, EstatePass.com, owned by Obolus, LLC, has risen to the challenge of helping Fiduciaries navigate the modern complexities of dealing with Digital Assets. By simplifying the process of transferring or closing the Digital Assets of the incapacitated or deceased through a managed database of over 1,200 online service providers, Fiduciaries have a proven, easy to use process to handle Digital Assets.

Obolus has setup EstatePass to benefit both the Fiduciary and the User. The Fiduciary may choose to use EstatePass to access or close, depending on any pre-set authority, a User’s Digital Assets. The User can utilize EstatePass’s Digital Advance Directive service to automatically effect a transfer or closure of accounts upon the User’s notification of death.

RUFADAA forces the Custodians to a limit of 60 days to either permit a request to access or close the User’s Digital Asset. This in turn creates an implicit requirement for such Custodians to deal with the simple fact that their user accounts are just like any other account held by a financial institution in that the Custodians must provide a ready process to handle such requests. Most Custodians do not presently have policies in place, as the focus was on acquiring users, not what to do with the accounts when the User is no longer able to manage the account. A prime example of the growth of the online graveyards is Facebook, which has over 300,000 worldwide Users dying every month. With over 1.6 Billion “Users,” there’s no indication as to how many of those are of the living variety. Advertisers fly like moths to the flames toward social media companies with high user account numbers, without a thought of how many of those accounts are actually merely acting as a reminder of those who once were. Companies like Twitter cull their accounts after six months of inactivity, but other behemoths like Facebook, LinkedIn, and Pinterest never remove accounts until otherwise notified. Only now, with RUFADAA coming online, will Fiduciaries have a path to not only collect or close the Digital Assets of the deceased, but of making those social media environment more of a place for the living.

Obolus and its EstatePass service, like the Obol, from which its name is derived, will finally permit those Digital Assets that were until now forced to wander Digital realm for an eternity to be at peace with RUFADAA’s help.

[1] All terms in quotes are as defined by the RUFADAA.

 

David H. Slonim, Esq. is the CEO and Co-Founder of Obolus, LLC and Elder Law attorney based in Melbourne, FL.

Challenges Facing Your Digital Estate

David

Since 2003, we have seen a significant shift in how our information is stored, delivered, and used.  In the past I used to advise clients to look in the mailbox for bills and statements to locate the assets of a deceased loved one. Now, in 2016, the mailbox is electronic and the bills, statements, and other notifications are getting to be all digital. We are seeing our lives transitioning to the internet “cloud” every day.  Regardless of how much we like it, or how comfortable we are with it, our lives tomorrow will be different that they are today.

This evolution in how we do what we do is causing, for some of us, a disconnect in how we see our world.  What used to be obvious is now more subtle; what used to be challenging is now easier.  And because of these changes, we take so much more for granted. Those pictures taken of uncle bob and his kids on Instagram; the documents received from a colleague stored on Dropbox; the credit card bill from Netflix; the invoice of your personal items from Amazon; the profile of you on LinkedIn; remember that payment via bitcoin or PayPal?; and don’t forget your timeline on Facebook. The technological changes we have been experiencing have enabled us to leave an imprint of our lives online in so many ways.  And whilst this is nice and it certainly is easy, the question that few are looking at is what happens to these digital ghosts of our lives after we have passed away?

Last year, in 2015, there were approximately 83 million Americans who had atleast one of their online accounts hacked if we look at just the top four hacks of the year[1]. About 80%[2] of all people who pass away in the United States have online accounts of one sort. As time goes on, that number will only increase, as the Gallup pollclearly shows. Of course, the more we go online, the greater the threats from hacks, ID theft, misappropriation of information, and con-artists absconding with ill-gotten funds. One personal anecdote I can share is that of a childhood friend of mine who passed away leaving behind an infant daughter. A miscreant posted on her Facebook page a link to have the friends and family donate money for a “charity” for the benefit of the child. After a time, those funds were collected and the person disappeared into the ether. This is just one case of many where people are abused during a time of emotional stress.

Several challenges face those survivors acting as representatives of the deceased when it comes to closing or accessing the still active accounts of the deceased. First, identifying the active accounts may be an issue if no inventory is left in place. Second, the representative has to have the time to navigate the web sites of these accounts to even determine who to contact or what form to complete so that the account can be closed. Sometimes these accounts may need to be accessed rather than closed, and that’s another significant matter that will be discussed below. Third, not every online account will require the same information to close such the account. For example, while Facebook may simply require proof that the person seeking to close an account is an immediate family member, LinkedIn requires the member’s name, your relationship to them, the company they worked for, a link to the profile, and the member’s email address; just to cite two examples.

As the internet ages with us, a critical mass is developing in the legal community and state legislatures to better help the representatives of the deceased to handle these online accounts. A national framework called the Revised Uniform Access to Digital Assets Act (RUFADDA) has been drafted to enable access and closure to these accounts. The difficult path that lies ahead is in having all states enact laws within their own legislatures that will ratify the RUFADDA. At present about 54%[1] of the states have begun the process of introducing legislation dealing with this. Florida is set to put into law it’s version this July. We can’t forget though that while the United States created the internet, it is worldwide, as are people’s accounts. So while our nation is slowly making strides, many online providers have no process or legal structures in place to allow for the living to handle their loved one’s accounts.

Further, and as I alluded to earlier, there is a bright line that cannot be crossed when dealing with the accounts. Accessing an account requires prior consent from the account owner. When was the last time you completed a form allowing your representative to access your email account.  Most likely, the answer is “never.” Here, the Stored Communications Act (SCA) and the Federal Computer Fraud and Abuse Act (FCFAA), actively prevent any unauthorized person from accessing such accounts. Doing so opens the door for civil and criminal penalties against the online account provider and yourself, if you were to access your loved one’s email, for example.

When examining the upcoming legal structure of the states’ work, it is very important to understand that the deceased’s digital assets are exactly that – assets. They must be dealt with in the same way a person’s other assets are handled, and that is by using a durable power of attorney or guardianship while a person is alive, but incapacitated, and through a person’s Last  Will or Trust when deceased. This will necessitate a court supervised administration of the estate to deal with the digital estate even if a person had no others financial assets to speak of.

There are things that can be done. First and foremost, speak to an attorney who is versed in digital estate management and who has the understanding and capability to ensure your legal estate documents are up to the future task of providing the prior consent required. Next, work with certain online companies like EstatePass.com to safeguard your information while living and will ensure your and your future representative’s legal rights are protected by having the prior consent on file, or if dealing with the accounts of a deceased loved one, EstatePass.com will provide a simple online tool to help you close the necessary accounts. Remember: simply having a list of accounts and passwords does not protect your rights or give a representative the authority to access these accounts.

[1] Vtech – 5M, 11/2015; Ashley Madison – 37M, 8/15; Office of Personnel Management – 22M, 7/15; Anthem – 18.8M 2/15

[2] http://www.census.gov/content/dam/Census/library/publications/2014/acs/acs-28.pdf

[3] Who Will Delete You? Fiduciary Access to Digital Asset, ActionLine Vol. XXXVII, No. 2 (Winter 2015)