All but a few 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?
Nathan Hannah, Attorney
I don’t find that definition of “digital asset” 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.
Digital assets in the form of your book, or 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.
By the way, 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.
Another whole aspect of handling digital assets involves 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 legislation, distinguishes between “digital assets” that are the digital equivalent of tangible personal property (e.g., files, like your book or recording) and electronic communications (such as email, but also including instant messages and text messages). The description also says that the legislation “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 legislation, 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?
There’s also a privacy aspect to 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 important information about your assets. 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 want the person administering your estate to be able to gain access to your digital assets that are the equivalent of tangible personal property, however. 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 junk 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 likely continue to expand in importance in estate planning. As that happens, it will become more important 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.
“PERSONALIZED INTESTACY?”
If a person dies without a will, it’s called intestacy. Another formulation is that someone who died without a will died intestate. Intestacy laws are laws that govern what happens to the assets of a deceased person who dies intestate. Those rules are necessarily one-size-fits-all to some extent.
A recent article by law professor Shelly Kreiczer-Levy in the Wisconsin Law Review made the argument that intestacy laws “cannot truly reflect diversity of lifestyles and associations.” I can’t disagree with that. The professor suggested “using big data to create personalized rules, tailored to the personal characteristics of each decedent.” I don’t know what data the professor is talking about, but it sounds complex. It’s also completely unnecessary.
It’s easy to avoid having the intestacy laws decide what happens to your assets. How easy? As easy as making a will. That’s personalized, and it avoids intestacy.
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: nhannah@dmyl.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.
