The Revised Uniform Fiduciary Access to Digital Assets Act

Not all of the Judiciary work involves criminal laws.  The House passed out an important probate law related to individuals’ online, or digital, assets.  Here is my report on the bill that I delivered to the House on Second Reading.

Report for H.152

H.152 is a bill that would enact the Revised Uniform Fiduciary Access to Digital Assets Act. The bill would modernize fiduciary law for the Internet age. Fiduciaries are the people appointed to manage our property when we die or lose the capacity to manage it ourselves. Nearly everyone today has digital assets, such as documents, photographs, email, and social media accounts, and fiduciaries are often prevented from accessing those accounts by password protection or restrictive terms of service. Digital assets may have real value, both monetary and sentimental, but they also present novel privacy concerns. The Revised Uniform Fiduciary Access to Digital Assets Act would provide legal authority for fiduciaries to manage digital assets in accordance with the user’s estate plan, along with other assets, while protecting a user’s private communications from unwarranted disclosure.

The following are some of the reasons this body should pass H.152.

  • The law would give Internet users control. It allows users to specify whether their digital assets should be preserved, distributed to heirs, or destroyed.
  • The law would provide efficiency and uniformity for all concerned. Digital assets travel across state lines nearly instantaneously. In our modern mobile society, people relocate more often than ever. Because state law governs fiduciaries, a uniform law ensures that fiduciaries in every state will have equal access to digital assets and custodians will have a single legal standard with which to comply. To date, 22 states have enacted this uniform law. Eighteen states, including Vermont, have introduced bills this session.
  • The law respects privacy interests. Private communications like email and social media conversations are protected by federal privacy law. This law would prevent the companies that store our communications from releasing them to fiduciaries unless the user consented to disclosure.
  • The law addresses four common types of fiduciaries. It provides appropriate default rules governing access to digital assets for executors of a decedent’s estate, agents under a power of attorney, trustees, and guardians.

Section by Section Report

Section 3552 contains definitions of terms used throughout the act.

Section 3553 governs the applicability of the act. It clarifies the scope of the act and the fiduciaries who have access to digital assets under the Revised law. It also carves out an exception for digital assets of an employer used by an employee during the ordinary course of business.

Section 3554 provides ways for users to direct the disposition or deletion of their digital assets at their death or incapacity, and establishes a priority system in case of conflicting instructions.

Section 3555 establishes that the terms-of-service governing an online account apply to fiduciaries as well as to users, and clarifies that a fiduciary cannot take any action that the user could not have legally taken.

Section 3556 gives the custodians of digital assets a choice of how to disclose those assets to fiduciaries.

 

Sections 3557 to 3564 establish the rights of personal representatives, agents acting pursuant to a power of attorney, trustees, and guardians. Each of the fiduciaries is subject to different rules for the content of communications protected under federal privacy laws and for other types of digital assets. Generally, a fiduciary will have access to a catalogue of the user’s communications, but not the content, unless the user consented to the disclosure of the content.

Here, I would like to explain a bit further what is content and what is a digital asset.

As explained in the definition section, content of an electronic communication means information concerning the substance or meaning of a communication. There are three criteria that must be met for digital information to be considered content.

  • It must have been sent or received by the user
  • It is held in electronic storage by a custodian
  • It is not readily accessible to the public

When considering whether a Facebook, Twitter, or blog post qualifies as “content of an electronic communication,” one important consideration is the intended audience.  For example, a tweet that is accessible to any member of the general public who “follows” the twitter account is not protected content because it does not meet the third prong of the definition (“is not readily accessible to the public”).  However, a Facebook post that can only be viewed by the user’s Facebook friends is protected content, because it is not readily accessible to the general public.

Therefore, a Facebook account, Twitter Account, or blog account do not fall neatly into content versus other digital assets.  A fiduciary may be permitted limited access under the Act solely for the purpose of closing the account, but not to view any protected content.

The second category addressed by the Act is “Digital Assets,” which means an electronic record in which an individual has a right or interest. Here are a few examples of digital assets: Facebook account, Twitter or blog post, bitcoin or bitcoin account, email account, electronic bill paying account, electronic banking account.  In each case, the content could be protected if it meets all three prongs of the definition for “content of an electronic communication,” or could be accessible without user consent if it does not meet one or more of those three prongs.

Brief run through of these sections. Sections 3557 and 3558 involve the disclosure of digital assets to a personal representative of the estate of a deceased user. Section 3557 involves access to content of electronic communications while section 3558 involves other digital assets other than content. Essentially, access to content of electronic communications is more restrictive, requiring clear prior consent of the user.

The same general pattern is followed through the next several sections for other fiduciary relationships – more restrictive access to content, less for other digital assets.

Section 3559 and 3560 involves agents, sections 3561 through 3563 involve trustees, and Section 3564 involves guardians.

Section 3565 contains general provisions relating to the rights and responsibilities of the fiduciary.

This section provides that a fiduciary under this act has the same fiduciary duties for user’s information as for other property that may come under the fiduciary’s control. It sets forth what those duties and authorities are. These duties are the same duties each fiduciary has under current Vermont law.

Section 3566 addresses compliance by custodians and grants immunity for any acts taken in order to comply with a fiduciary’s request under this act.  Sections 3567 and 3568 address miscellaneous topics, including retroactivity.

As we heard from a probate judge, “Currently, there are no statutory provisions that explicitly provide fiduciaries with the authority to access digital assets. As a result, unnecessary complications can and do arise. Both in the practice and judicial arena, the statute is essential for fiduciaries in this digital age.”

 

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