Forty-five states in the United States have now adopted the Revised Uniform Fiduciary Access to Digital Assets Act (the RUFADAA). As adopted in Arizona, the RUFADAA defines a “digital asset” as “an electronic record in which an individual has a right or interest.” What does that mean, and how is it going to be applied to actual estates?
First, what is a fiduciary? The RUFADAA defines a fiduciary as “an original, additional or successor personal representative, conservator, agent, [or] trustee….” That’s consistent with how the term is generally defined. In this context, the fiduciary is going to be either the personal representative of your estate or the successor trustee of your trust.
Next, what, exactly, is a “digital asset?” I don’t find the definition from the RUFADAA that I quoted above to be particularly useful by itself. How do you know if you have a right or interest in something that you have posted on Facebook, or Instagram, or similar sites? I am told that some such sites claim in their terms of service that anything you post becomes the property of the proprietors of the site.
If you have social media postings promoting your creative works or your business, I think it’s pretty clear that you have a right or interest in the content of such postings. That means that the content of those postings should qualify as digital assets under the RUFADAA. I suggest that you read the terms of service of the site where the content is posted, and get the advice of an attorney if necessary, to get clarity on whether or not the proprietors of the site may claim that the content belongs to them.
Digital assets in the form of your book, original music recording, or similar creative works should be somewhat easier to characterize. If you have things of that nature stored in cloud storage, it seems obvious to me that they would qualify as electronic records in which you have an interest.
Another type of digital asset is computer code that you may have written or helped to develop. There are online platforms, such as Github, that are designed for individuals and companies to develop and store computer code. That’s an example of digital assets in the hands of a service provider that may have substantial monetary value, as opposed to things like Facebook accounts which, frankly, I don’t see as having any monetary value.
The Uniform Law Commission (that’s the organization that produces uniform laws like the RUFADAA), in its description of the Act, distinguishes between “digital assets” that are the digital equivalent of tangible personal property (e.g., files, like your book or music recording) and electronic communications (such as email, but also including instant messages and text messages). The description also says that the Act “restricts a fiduciary’s access to electronic communications such as email, text messages, and social media accounts unless the user consented in a will, trust, power of attorney, or other record.” That makes it sound like even with this law, it may be difficult to predict how service providers such as Google and Facebook are going to react to fiduciaries’ attempts to retrieve digital assets, and particularly things that can be considered communications, in the service providers’ control. Is an Instagram page electronic communications, or is it personal property?
That brings up another aspect to digital assets: privacy of your digital communications. You may not want your personal representative or successor trustee to see your texts or instant messages, or your emails for that matter, unless they contain information about your assets or other information that will help in administering your estate or trust. It seems unlikely that texts or instant messages would be useful in administering your estate or trust, anyway. Take it from me, conducting important business via texts or instant messages is asking for trouble.
You likely do, however, want the person administering your estate to be able to gain access to your digital assets such as your creative works, as well as things like documents that you have in cloud storage that have no monetary value but contain important information. As for those assets, I suggest that you take a close look at the terms of service established by your digital service providers, such as cloud storage providers. The terms of service, in case you don’t pay attention to such things, is the stuff that you checked the box saying you read it and agreed to it but probably didn’t actually read.
This is a topic that will only become more important in estate planning as cloud storage becomes increasingly ubiquitous. As that happens, it will be more important than ever to think about which service providers have your digital assets and what you can do to minimize the hassle for whoever is going to have the task of collecting those assets. If you want to make sure that your will or trust contains provisions designed to make sure that your successors can collect your digital assets and communications, I can help.
THE LAST WORD (MAYBE) ON PROPERTY TITLE FRAUD
In my December, 2019, Real Estate Law Update, I wrote about a service that was, and still is, being heavily advertised as a way for homeowners to protect the title to their property against fraudulent schemes. At the time I concluded that the service is probably unnecessary for any homeowner who has the most commonly used type of title insurance policy.
I recently became aware of a service that is being offered to the public by the Pima County and Maricopa County Recorders’ offices that makes that heavily advertised service look even less necessary. The service being offered by the County Recorders’ offices is simple: if you sign up, you will receive an email notification when a document is recorded in your name. That’s the same basic function that the heavily advertised service provides, but with one big difference: the service offered by the County Recorders’ offices doesn’t cost anything.
The email notification offered by these services is intended to make you aware that a document has been recorded in the Recorder’s office with your name on it. If you didn’t recently buy or sell a property, or take out or pay off a mortgage, the recording of a document with your name on it could be an indication of attempted title fraud. Notice of such an occurrence is undoubtedly useful, although probably quite rare.
The web site of that heavily advertised service does suggest that they have personnel who will assist you if a fraudulent document is recorded that affects the title to your property, but as I mentioned earlier, your title insurance policy probably covers that situation. In that event, the title insurance will provide expert assistance, including a lawyer, to undo any problem with your property title caused by the fraudulent document.
- Nathan B. Hannah is a Shareholder in the Tucson office, and practices in the areas of estate planning and administration, real estate, and commercial transactions. He is also a noted blogger, and you can find more of his articles on his private blog,
Contact Attorney Hannah: email@example.com or 520/ 322-5000
This communication is designed to bring legal developments of interest to the attention of our clients and others. It should not be relied upon as a substitute for specific legal advice in a particular matter. For further information on any of the subjects discussed, or for legal advice in connection with any particular matter, please contact us.