Revised Uniform Fiduciary Access to Digital Assets Act – LB 829

Revised Uniform Fiduciary Access to Digital Assets Act
– A Summary –

On April 13, 2016 the Nebraska Legislature passed LB 829, which adopts the Revised Uniform Fiduciary Access to Digital Assets Act (Revised UFADAA). The Act was signed into law by the Governor on April 20, 2016.

In the Internet age, the nature of property and our methods of communication have changed dramatically. A generation ago, a human being delivered our mail, photos were kept in albums, documents in file cabinets, and money on deposit at the corner bank. For most people today, at least some of their property and communications are stored as data on a computer server and accessed via the Internet.

Collectively, a person’s digital property and electronic communications are referred to as “digital assets” and the companies that store those assets on their servers are called “custodians.” Access to digital assets is usually governed by a terms-of-service agreement rather than by property law.  This creates problems when Internet users die or otherwise lose the ability to manage their own digital assets.

1. A fiduciary is a trusted person with the legal authority to manage another’s property, and the duty to act in that person’s best interest. , addresses four common types of fiduciaries:1. Executors or administrators of deceased persons’ estates;
2. Court-appointed guardians or conservators of protected persons’ estates;
3. Agents appointed under powers of attorney; and
4. Trustees.

The Revised UFADAA gives Internet users the power to plan for the management and disposition of their digital assets in a similar was as they can make plans for their tangible property. In case of conflicting instructions, the act provides a three-tiered system of priorities:

1.  If the custodian provides an online tool, separate from the general terms of service, that allows the user to name another person to have access to the user’s digital assets or to direct the custodian to delete the user’s digital assets, Revised UFADAA makes the user’s online instructions legally enforceable.
2.  If the custodian does not provide an online planning option, or if the user declines to use the online tool provided, the user may give legally enforceable directions for the disposition of digital assets in a will, trust, power of attorney, or other written record.
3.  If the user has not provided any direction, either online or in a traditional estate plan, the terms of service for the user’s account will determine whether a fiduciary may access the user’s digital assets. If the terms of service do not address fiduciary access, the default rules of Revised UFADAA will apply.

Revised UFADAA’s default rules attempt to balance the user’s privacy interest with the fiduciary’s need for access by making a distinction between the “content of electronic communications,” the “catalog of electronic communications”, and other types of digital assets.

The content of electronic communications includes the subject line and body of a user’s email messages, text messages, and other messages between private parties. A fiduciary may never access the content of electronic communications without the user’s consent. When necessary, a fiduciary may have a right to access a catalog of the user’s electronic communications – essentially a list of communications showing the addresses of the sender and recipient, and the date and time the message was sent.

For example, the executor of a decedent’s estate may need to access a catalog of the decedent’s communications in order to compile an inventory of estate assets. If the executor finds that the decedent received a monthly email message from a particular bank or credit card company, the executor can contact that company directly and request a statement of the decedent’s account.

Other types of digital assets are not communications, but intangible personal property. For example, an agent under a power of attorney who has authority to access the principal’s business files will have access under Revised UFADAA to any files stored in “the cloud” as well as those stored in file cabinets. Similarly, an executor that is distributing the decedent’s family photo albums to heirs will also have access under Revised UFADAA to photos the decedent uploaded to a photo-sharing web site.

Under Revised UFADAA Section 15, fiduciaries for digital assets are subject to the same fiduciary duties that normally apply to tangible assets. Thus, for example, an executor may not publish the decedent’s confidential communications or impersonate the decedent by sending email from the decedent’s account. A fiduciary’s management of digital assets may also be limited by other law. For example, a fiduciary may not copy or distribute digital files in violation of copyright law, and may not exceed the user’s authority under the account’s terms of service.

In order to gain access to digital assets, Revised UFADAA requires a fiduciary to send a request to the custodian, accompanied by a certified copy of the document granting fiduciary authority, such as a letter of appointment, court order, or certification of trust. Custodians of digital assets that receive an apparently valid request for access are immune from any liability for acts done in good faith compliance.

Revised UFADAA is an overlay statute designed to work in conjunction with a state’s existing laws on probate, guardianship, trusts, and powers of attorney. It is a vital statute for the digital age, and should be enacted by every state legislature as soon as possible.

Provided by:  National Conference of Commissioners on Uniform State Laws, http://www.uniformlaws.org.