A revised UFADAA keeps the PEAC(e)
After the drafting of two distinct statutes and more than a year of subsequent comment and stakeholder negotiation, a revised proposal from the Uniform Law Commission (ULC) is closer than ever to securing widespread support in establishing a statute governing third-party fiduciaries’ access rights to “digital assets.” The Revised Uniform Access to Digital Assets Act (RUFADAA) would govern fiduciaries’ ability to disclose the digital assets of trust settlors and deceased and incapacitated persons. Fiduciaries refers to persons such as trustees, estate executors (referred to in Wisconsin as “personal representatives”), and agents under financial powers of attorney that are directed to manage the assets of a trust, estate, or incapacitated individual, respectively.
As use of email, social media, and other online media has become ubiquitous, users are accumulating rights on these platforms, which are broadly defined as digital assets. The term is defined under RUFADAA as “an electronic record in which an individual has a right or interest,” but “does not include an underlying asset or liability.” Digital assets include data stored on a digital device such as a computer, tablet, or smartphone, content uploaded onto a website or app, or rights in other categories of digital property such as the items earned in online gaming. It does not, however, include underlying assets that can be accessed in a digital account. For instance, the funds of a bank account for which an individual maintains an online account are not considered digital assets.
RUFADAA is the product of a more than two-year endeavor undertaken by the ULC, which is a nonprofit association of attorneys that drafts standardized laws for enactment by state legislatures. In its current form, RUFADAA enables individuals to provide their fiduciaries the ability to review, inventory, and if necessary distribute digital assets in wills, trusts, and powers of attorney. It does not, however, provide fiduciaries with access to digital assets by default. Instead, individuals must take affirmative steps to provide their fiduciaries with this power in their estate planning documents. The shift in default provision from automatic access to requiring the affirmative granting of authority represents a compromise between the ULC and other stakeholders in the drafting process.
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Upon the ULC’s release of the first draft of the original UFADAA in May 2013, an entity called NetChoice provided the strongest comments. NetChoice is a trade association of e-commerce businesses including AOL, Facebook, and Google. Its formal comments and subsequent analysis critiqued multiple aspects of the draft, including an overall insufficient focus on individual privacy and terms of service agreements. Based on these criticisms, many of the same organizations that constitute NetChoice voiced support for a competing proposed statute, the Privacy Expectation Afterlife and Choice Act (PEAC). Unlike UFADAA, PEAC required fiduciaries to obtain a court order to facilitate disclosure of a deceased individual’s digital property in nearly all circumstances, and PEAC did not address digital asset disclosure of incapacitated individuals.
Faced with the possibility of enactments of UFADAA and PEAC, stakeholders convened to discuss their differences. The result was a revised UFADAA which as of the date of this article appears to have the support of both groups. While RUFADAA stops short of establishing fiduciary access to digital assets as a default rule, it does expressly permit individuals to grant fiduciaries access in their wills, trust agreements, and powers of attorney without the need for court involvement. Further, it provides for the possibility of an online tool (Google’s inactive account manager being the most famous example) under which individuals may designate individuals to receive notice or access to their digital assets upon death or disability.
For attorneys practicing in the estate planning or technology law areas, the debate over UFADAA and PEAC, and the potential codification of RUFADAA, highlights the need to address digital assets in estate planning and certain corporate governing documents. Meanwhile, individuals who are concerned about future access to their emails and other online content need to be certain to raise the issue with their attorney, to ensure that the correct documents are put into place, complete with language coinciding with applicable law.
Benjamin Brunette is an attorney in the Madison office of Whyte Hirschboeck Dudek S.C. where he is a member of the Technology and Trusts & Estates teams. He can be reached at bbrunette@whdlaw.com.
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