How to Set Up Power Over a Client’s Digital Assets

computer that holds digital assets and accountsAn increasingly important issue in estate planning is how to handle a decedent’s digital assets, e.g., email and social media accounts, digital files and photographs stored in the cloud. Here’s what to do.

You may have heard about the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) (Prob C §§870–884), enacted in California in 2017, but it’s not as simple as the Act’s name implies. Plus, you need to understand the Act’s terminology: Internet companies are “custodians”; your client is the “user”; “digital asset” means an electronic record in which the user has a right (it does not mean the underlying asset); and the custodian can offer an “online tool” (separate from the terms-of-service agreement) in which the user can provide directions for disclosure or nondisclosure.

So, what to do?

Your client can include a provision in his or her will or trust that grants power over digital assets to the personal representative or the trustee. The Act requires the custodian of the digital assets (unless prohibited in another of the client’s instruments) to comply with the fiduciary’s request for disclosure of the digital assets and to terminate an account.

Here’s a sample provision giving the personal representative, executor, or trustee power over digital assets and accounts:

Power Over Digital Assets. My [personal representative, executor, or trustee]  has the power to access, handle, and dispose of my digital assets. The term “digital assets” includes but is not limited to files stored on my digital devices, including desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar digital device. The term “digital assets” also includes emails, blog posts, documents, images, audio, video, and similar digital files stored in a digital account. My [personal representative, executor, or trustee] has the power to access, handle, and dispose of my digital accounts, including email accounts, blogs, software licenses, social network accounts, social media accounts, file-sharing and storage accounts, financial management accounts, domain registration accounts, domain name service accounts, Web hosting accounts, tax preparation service accounts, online stores, and affiliate programs. _ _[I have prepared a memorandum with instructions concerning my digital assets. I direct my [personal representative, executor, or trustee] to follow my instructions concerning digital assets.]_ _

If the online tool offered allows a user to modify or delete a direction at all times, a direction on disclosure in the online tool overrides a contrary direction in the user’s will, trust, or other instrument.

If your client hasn’t used the online tool, or the custodian of the online tool hasn’t provided a way to change it, the decedent may allow or prohibit a disclosure of digital assets by will, trust, or other instrument.

Note that RUFADAA provides for disclosure not access. Custodians of digital assets may still require a court order for access, claiming privacy concerns and overriding federal law.

For more on the powers that should be specifically granted to the decedent’s personal representative or trustee, check out CEB’s California Estate Planning §5.45A. On inventorying assets, including digital assets, see CEB’s California Decedent Estate Practice, chap 33. On the powers and duties of executors, see CEB’s California Will Drafting, chap 33.

Other CEBblog™ posts you may find useful:

© The Regents of the University of California, 2018. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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