Tag: RUFADAA

Digital Asset Planning: Who Will Care for Your Pokémon When You’re Gone?

Minnesota Joins Other States Enacting the Revised Uniform Fiduciary Access to Digital Assets Act

Eleanore

On May 22, 2016, Minnesota’s Governor signed a bill enacting the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). The new law takes effect August 1, 2016, and will be found in Minnesota Statutes Chapter 521A. The new law creates a clear procedure to enable access to or disclosure of online accounts and digital assets to a person’s fiduciaries. A person’s fiduciaries may include an agent under a power of attorney, a court-appointed conservator of a living person, a trustee of a trust, or a court-appointed personal representative of a deceased person’s estate.

At latest count (updated July 14, 2016), including Minnesota, 18 states have enacted RUFADAA into law, and 13 other states have introduced RUFADAA in their legislatures. My understanding is that many other introductions of RUFADAA are planned within the next year. An up-to-date list of RUFADAA introductions and enactments in state legislatures can be found on the Uniform Law Commission Web site. A good summary of RUFADAA is also available on the ULC Web site.

Even with the new enactment of RUFADAA in Minnesota and other states, it is important for individuals to plan ahead for access to or disclosure of their online accounts and digital assets during incapacity or after death. The federal Stored Communications Act (18 U.S.C. § 2702) creates privacy rights to protect the contents of certain electronic communications and files from disclosure by certain providers of electronic communication services or remote computing services. If the privacy protections of the Stored Communications Act apply, an online account service provider is prohibited from disclosing the contents of certain electronic communications and files unless an exception under § 2702(b) of the Act is met. Under § 2702(b)(3) of the Act, with the “lawful consent” of the user, an online account service provider may disclose the contents of the user’s electronic communications and files that are protected by the Act. RUFADAA provides a clear state law procedure for fiduciaries to follow to request access to or disclosure of online account contents and other digital assets.

So, a user’s “lawful consent” for disclosure of digital assets should be included in an individual’s estate plan, such as an individual’s financial power of attorney document for use while the individual is living, the individual’s will for use after the individual is deceased, and, if applicable, the individual’s revocable living trust (or irrevocable trust) for use if any digital assets are held in the trust. Under Section 4(b) of RUFADAA, it is also possible to sign a stand-alone document (what RUFADAA calls a “record”) to allow or prohibit disclosure to a fiduciary of some or all of an individual’s digital assets, including the content of electronic communications sent or received by the individual.

A document evidencing a user’s “lawful consent” for disclosure of digital assets is important to coordinate with the full fiduciary access and disclosure procedures under RUFADAA. In addition, there are other important digital asset issues that should be addressed as part of a comprehensive estate plan that an estate planning attorney can help plan and implement. For example, how should digital assets be distributed at death? Should family photos and videos be copied for each of the individual’s children? Should some beneficiaries be prohibited from receiving some of the digital assets? Should some of the digital assets be deleted on the individual’s death?

Because so many aspects of our personal and business lives have moved into the digital world, it’s important for an individual considering disclosure of and distribution of digital assets to seek legal advice from an attorney licensed to practice in the individual’s state as part of a comprehensive estate plan.

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.