Private Client Services Update – Estate Planning for Digital Assets and Digital Access: Bill Proposes to Adopt the Uniform Fiduciary Access to Digital Assets Act in Virginia
The traditional estate plan does not include a “digital assets” provision, and most people have never thought about inventorying their digital property. In a world where almost every asset has a digital component, now is a good time to consider what happens to an individual’s digital assets at death or incapacity.
Digital assets can include anything from social media posts, like those on Facebook and Twitter, to financial and health data that is stored online. The hundreds of usernames and passwords you use daily to access various online accounts also are considered digital assets. The e-mail accounts that most of us use hourly also are digital property. Most of the time digital assets are hidden from view and not discussed in an estate planning context, creating problems and complexities when a personal representative needs to access them after an individual’s incapacity or death.
Consider an individual who does all of his banking online and has opted-out of receiving paper statements in the mail. Upon his incapacity or death, his family or personal representative is left without access to the bank account absent appropriate permission for access. The family may not even know of the existence of the bank account or, may not know, if the bank account automatically pays bills that would go unpaid if the bank account is closed. Unpaid bills can result in costly fines, not to mention the headache of obtaining a court order, which some banks require to access a deceased or incapacitated individual’s bank account.
Currently, the terms of service of a particular digital service provider, like Google, Yahoo, or Facebook, ultimately govern what happens to an individual’s data in the event of death or incapacity. Every time you click “Agree” without reading the terms of service, you are sending your digital assets out into cyberspace without understanding or planning for what will happen to them upon your death. Some of these digital assets may be more trivial than others, but storing financial or personal information on any website can put an individual at risk for identity theft, even after the individual is deceased.
The world of digital property is still very new. Attorneys and lawmakers are unsure of how to address the varying concerns that digital assets present at incapacity or death. The issues discussed above are merely the tip of the iceberg when it comes to the problems digital assets pose to a personal representative or surviving spouse trying to inventory or manage an estate or simply remove their deceased loved one’s Facebook page from public view.
In 2013, Virginia enacted a narrowly drawn statute allowing the personal representative of a deceased minor to assume the deceased minor’s terms of service agreements and thus gain access to the minor’s digital accounts for the purpose of consenting to and obtaining the disclosure of the contents of the deceased minor’s communications and subscriber records. See Va. Code §§ 64.2-109, 110 (1950). The statute, however, does not address the incapacity of a minor or the death or incapacity of anyone over the age of eighteen. It does not include access to the deceased minor’s bank, brokerage, or other financial accounts.
The Fiduciary Access to Digital Assets Committee of the Uniform Law Commission has recently approved the final form of the Uniform Fiduciary Access to Digital Assets Act (the “Act”) that addresses many of the issues facing fiduciaries in the digital access realm. The Act attempts to balance the competing interest of fiduciaries attempting to gain access to digital property without violating federal privacy laws. Most importantly, the Act provides a fiduciary, including a personal representative, conservator, guardian, agent, or trustee, the power to access and control digital assets, including electronic records and communications.
This month Delegate James A. Leftwich, of Chesapeake, Virginia, introduced House Bill 1477 proposing to adopt the Act in its entirety in Virginia. Senator Frank M. Ruff, Jr. of Clarksville, Virginia, will patron the Bill in the Senate. The Bill has been referred to the Committee for Courts of Justice. Virginia is one of only nine states that have proposed adopting the Act as part of its statutory code at this time. Our attorneys will be following the Bill throughout the legislative session this winter.
Our Private Client Services Group attorneys are eager to educate our clients and their professional advisors on the problems digital assets pose with incapacity and at death and possible ways to solve, or at least alleviate, some of the burden placed on fiduciaries in this increasingly digitalized, pixelated world. – Rob Goodman and Ellis Pretlow
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2024.