Fiduciary Access to Digital Accounts

Fiduciary Access to Digital Accounts

Written by Tom W., OLN Freelance Attorney.

Life is increasingly lived in cyberspace, with email, financial and social media accounts capturing information ranging from the trivial, to the personal, to the indispensable.

These accounts represent digital assets—and the electronic explosion has sparked recent discussions in estate planning circles about how they should be treated upon death or incapacity. Internet service providers generally have asserted control over access to accounts, often excluding trustees and executors based on a 1980s federal law called the Stored Communications Act (“SCA”) that makes it a crime to access electronic communications without authorization (18 U.S.C. Section 2701).

A violation of the SCA could entail nothing more than “logging onto another’s email account without permission and reviewing material therein,” according to one court. Cardinal Health 414, Inc. v. Adams, 582 F.Supp. 2d 967 (MD Tenn. 2008). Law professor David Horton, writing in a forthcoming article in Vanderbilt Law Review, says, “scholars have voiced concern that fiduciaries violate the SCA by taking control of a decedent’s electronic assets.” (67 Vanderbilt Law Review).

In July, the Uniform Law Commission took a step to help fiduciaries. The commission passed the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”), saying that the act is meant to give fiduciaries “authority to access, control, or copy digital assets and accounts.” This access is overridden if an account holder expresses privacy preferences in a will, trust or other documents. You can view a draft UFADAA and comments here.

There are four categories of fiduciaries covered: personal representatives of an estate; guardians or conservators of a protected person’s estate; agents named in a power of attorney; and trustees.

UFADAA would need to be adopted by a state’s legislature to become law, and earlier this month Delaware became the first state to enact legislation similar to UFADAA, covering email, social media, financial management, health care and other digital accounts. Although eight other states have already passed laws concerning fiduciary access, they have been more limited in scope, says attorney Suzanne Walsh, who chaired the UFADAA drafting committee. (The states are Connecticut, Idaho, Indiana, Louisiana, Oklahoma, Rhode Island, Nevada and Virginia).

UFADAA raises concerns for privacy advocates, who contend that electronic records should be accorded more protection. Walsh says that the committee discussed these concerns, but concluded that fiduciaries cannot do their job properly without access to digital accounts. Also, she points out, if a person wants to block access, this can be done through proper estate planning. “If I make it clear that my fiduciary does not have access,” says Walsh, “then my fiduciary does not have access.”

The bottom line? Given the uncertainty in the law and the time it will take for UFADAA to be adopted by more states, you should directly address digital assets in your client’s estate plan. Professor Horton write that where a “will or trust expressly allows a fiduciary to control her electronic possessions,” authorization is given under the SCA.